As the Federal Reserve begins its fourth round of easing, the nation’s debt burden is expected to rise, as the economy grows and homeowners and businesses borrow more to meet their bills.
But with many Americans already on the hook for significant debt, how should Americans avoid the dreaded debt trap?
Here are three ways to cut your debt and avoid a costly trap: The Debt Trap: Avoiding a Debt TrapIf you or someone you know is struggling with debt, it’s important to make sure you know what’s involved.
Here are some ways to avoid getting caught in a debt burden trap:Ask your lender, or a financial adviser.
If you’re in a position to negotiate, ask your lender to send you a copy of the bill or a copy that’s attached.
Your lender may even ask you to complete an inventory of the debt on your behalf.
If your lender can’t help, try to negotiate the terms of the loan on your own.
You can often negotiate a lower rate and terms for a higher percentage of the sale price.
If that doesn’t work, try contacting your credit card company.
It may be possible to negotiate a reduction in the interest rate you pay.
The debt collector may be able to help you negotiate the best deal on the debt, or even make it cheaper for you.
If the debt collector can’t, you can always contact your lender.
A financial adviser can also help you reduce your debt.