Being a single parent is not easy as most of the times they end up facing deep debt troubles. Moreover, young and single moms face a lot of difficulty as compared with single fathers due to several social, behavioral and economic factors. Therefore, it is highly natural that single mothers will be seriously in debt and will need help. Well, there are in fact many such bits of help and benefits available for single parents to ease up their finance and help them in debt management.
Debt Solutions Available For Young And Single Moms
You may tend to think that a consolidation loan will help you in getting rid of your debt or even a debt settlement for that matter and continue to take on loans till the time all sources disappear. However, both will have its consequences and both will depend on your affordability, credit and lots of other factors whether you will be successful in paying it off or not.
You may use all the credit you had as you are broke and want to provide the best for your baby but you will have to think about the consequences of each. This is because when you take on a credit there is no other alternative but to pay it off along with added interest on the principal amount.
Now in such a situation and not wanting to see your baby suffer, you may stop paying your consolidation loan since you cannot afford it which is very honestly true. But just like all other responsibilities to your child, it is also your responsibility to pay off your debt and manage your finance well. If you stop taking collection calls or stay locked in your room will not help you much as it will start taking a huge toll on your health, physical, mental as well as financial.
It is time to act wisely and consider all your available options before you take on a loan. Consider all benefits and support you may get, weigh it with your needs and essentially talk to a credit counselor to know what you can do.
Starting Your Debt Management Process
To start with your debt management process as a single mom you must first stop making excuses and think about a strategic plan to follow to take charge of your life as well as your child.
- At first, you must know that as a single parent you will have to do it all as no one else will do this for you. Everything is up to you to do even if this is not the road you chose but it is surely the road you will have to travel.
- Next up, you must know that you have very limited options and no one to fall back on for resources. Therefore, you must know your affordability first and work according to your budget so that you do not spend on something that is entirely unnecessarily. If you incur more expenses it is evident that you will experience setbacks that you will find hard to recover from.
- Another thing you must know is that it is very hard to solve any existing debt problem with more debt. Therefore, it is wise to visit https://www.nationaldebtreliefprograms.com or others to look for financial respite with a few grants and benefits. This will help you a lot in this process.
- If you are considering debt consolidating then you will need to do everything that it does not exacerbates the problem. To make it successful you must stop taking more debt or credit card charges, start saving enough so that you can pay off the new loan and change your behavior and lifestyle that led you to accumulate debt in the first place. It is extremely necessary to make sure that you do not owe more than the amount of debt that you have already consolidated.
- Next, you should contact a nonprofit credit counseling agency to look at all available options. to find a reliable agency that will not take advantage of your condition you can contact the Association of Independent Consumer Credit Counseling Agencies or even the National Foundation for Credit Counseling.
- Have all your income and expenses reviewed by the certified credit counselor so that you two can build up a workable spending plan. They will tell you exactly how much money you will need to live and to build an emergency fund to repay your debt.
- You will also have to consider your income and trim your expenses if you stick to your current job. Otherwise, you can take up a second job to earn more or switch your job to one that pays more. This is not easy but all these are necessary for your child’s benefit.
- Never consider bankruptcy unless all your options are closed and suggested by the credit counselor. Bankruptcy is an option only for the hopeless and helpless as it will stay on your credit report for 10 years. It will hurt your future possibilities not only in getting the loan but also in getting a job, renting a decent apartment, buying a car, insurance and a lot of other things.
The sacrifices that you will make now well worth it when you get your finances back on the track and live a debt free life.
Different Debt Solutions
There are a number of debt solutions available for you that you may consider such as:
- Debt Management Plan: This is an informal agreement between you and the unsecured creditors. You agree to repay a reduced amount of your debt to a debt management company who will distribute it fairly to all your between your creditors. Eliminating charges or addition of new interest may also be negotiated.
- IVA: Similar to a debt management plan, IVA is a legally binding contract between you and your creditor for lower monthly payments with some part of it written off and all interest and charges are automatically frozen. You pay the debt as much as you can afford over a period of 60 months.
Whatever you choose, always avoid taking on further debts while following such programs.