Debt Management - ClayWallet

Pay Off Debt: Tools and Tips

Learn strategies for whittling down what you owe, and get insight into the best approach depending on your debt load.

There are several options for paying off debt, and that can sometimes feel overwhelming. You might be thinking about a DIY strategy combined with budgeting and side hustles to increase your income. Maybe you’re contemplating debt consolidation or feel you need to check out debt relief options.

Here’s how to choose a strategy, and some tools and tips that can help you get out of debt.

Assess Your Debt Load

To a large extent, the best way to get out of debt will depend on how much you owe compared with your income.

Start by understanding whether you simply have too much debt. That gives you an idea of whether you can use a DIY strategy for payoff or should consider debt relief options.

The calculator below compares the amount you owe on key debt types, and compares it to your gross annual income (total pay before taxes or deductions).

Weigh DIY Payoff Methods

Debt snowball: With this strategy for getting out of debt, you focus on paying off your smallest balance first. Put all the extra money you can dedicate to debt payoff toward that account while continuing to pay the minimums on the others.

When that debt is wiped out, add the amount you\’d been paying on it to the minimum payment on the next largest debt. The amount you’re paying on the focus debt keeps growing like a snowball getting larger as you roll it.

Debt avalanche: Focus on the debt with the highest interest rate first (while paying minimums on the others), then the next highest rate and so on.

This might save you money over the long run by wiping out the costliest debt first. But depending on the balance, it might take a while to zero out that first debt. If quicker wins would motivate you, snowball may be a better method.

Focus on high credit utilization: You could also focus on paying down your credit cards with the highest credit utilization — the highest percentage of the credit limit being used. Credit utilization plays a big role in your credit score, so in this case paying down debt could have a side benefit of helping your score.

Consider Debt Consolidation to Get Out of Debt Faster

Debt consolidation takes your high-interest debt, like credit card balances, and rolls them into one monthly payment, ideally at a lower interest rate. Some potential benefits of consolidating your debt include:

  • Lowering your interest rate.

  • Making your payments more manageable.

  • Shortening the time it takes to pay off your debt.

You might be able to use a balance transfer credit card or a debt consolidation loan, but note that you’ll likely need a good credit score to qualify. Each lender sets its own requirements, but generally scores of 690 or higher count as good credit scores.

It’s also possible to borrow from your 401(k) or to consider using some of your home equity to pay debt — but be aware that you risk your retirement savings and your home in those cases.

Boost Debt Payoff with Budgeting

If you feel like you don’t have enough money to cut down debt, getting clear on your budget may help. And keeping track of the money you have coming and going is always a good idea, no matter your financial goals.

Choose a system that works for you: There’s no one-size-fits-all budgeting system, and budgeting can be harder for some people than others. For example, being neurodiverse can come with unique financial challenges. But the good news is that there are several ways to budget, and you can find the way that works for you, like the zero-based approach, the envelope system or the 50/30/20 budget.

Use technology to make things easier: Technology can make budgeting easier by letting you keep track of all of your financial accounts, categorize your expenses and automate your payments. There are also several budget apps to help you stay on top of your money.

Lower Your Bills

Finding ways to reduce your monthly bills can help to free up more money to put toward debt payoff. And every little bit counts. Don’t be afraid to contact your service providers and see if you can negotiate a better rate on expenses like your cell phone bill or energy bill.

You may also be able to negotiate your bills for things like your car insurance, credit cards, gym memberships and cable service. Switching providers might get you a better deal. Do your research to compare the rates of different companies, be firm and don’t forget to make follow-up calls if needed.

Make More Money

If you have the ability, making more money even in the short term can boost your debt repayment plan.

Consider getting a part-time job, selling gently used or unused items or using your skills to do freelance work. A side hustle like house sitting, driving for Uber or Lyft or even dog walking can fuel your progress.

Don’t rule out the possibility of increasing your current salary. Research and preparation may help you negotiate more money at your current job.

Don’t be afraid of Debt Relief

If you’ve tried budgeting, negotiating your payments and bringing in more cash, all to no avail, you might want to try debt relief. Debt relief can help you change the amount or the terms of your debt to lighten your financial burden, but it’s not for everyone.

You should also explore debt relief if paying off your unsecured debt like credit card bills, personal loans and medical debt within five years isn’t feasible or if your total amount of unsecured debt equals 50% or more of your gross income.

Debt management typically involves working with an accredited counseling agency to pay off your debt at reduced interest rates or with waived fees.

Bankruptcy — Chapter 7 and Chapter 13 are the two most common forms — involves either erasing most unsecured debt or being placed on a court-approved repayment plan for three to five years.

Debt settlement might suit people who don’t qualify for bankruptcy or who simply don’t want to file for it. You can try settling debt on your own by contacting creditors or you can hire a company to do it for you.

How to Get Out of Debt: 7 Tested Tips

Find ways to make more money, look into debt consolidation and know what motivates your payoff goal.

Getting out of debt is something you can do yourself with the right tools and motivation.

Take it from those who’ve been there. The people profiled in NerdWallet’s How I Ditched Debt series tackled thousands of dollars of debt using smart strategies and everyday tricks: making the most of your money, using extra payments and knowing how to stay motivated, among other strategies.

To inspire you, here are seven tips from some of their stories — and the steps you can take on your own debt payoff journey.

Make the Most of Every Dollar

Do it yourself: Building a budget is key to any financial plan, but especially so when you’re paying off debt.

NerdWallet recommends the 50/30/20 budget: Keep essential expenses, like housing, to 50% of your income. Then allocate 30% for wants, and use 20% for savings and debt pay-down. Since you’re focused on paying off your debt, you may decide to use money from your wants category to make extra debt payments. That will wipe out debt faster and help you save on interest. You can always revise your budget as necessary.

Once you have your budget, track your progress. You can set yourself up for success by automating as much as possible. And consider using some or all of windfalls, like a tax refund or work bonus, to make a dent in debt balances.

Get inspired: Stephanie Stiavetti wanted to trade her tech job for a career in food and cooking, but $64,000 in student loan and credit card debt was holding her back.

Stiavetti’s plan involved putting almost every extra penny toward paying off debt. “I still went out with friends and enjoyed the occasional vacation, but I did so with an eye toward budget spending and found ways to make the most of every dollar instead of indulging in expensive luxuries,” she says.

Work Some Side Hustles

Do it yourself: Consider any skills you have, such as web design or coding, that you can offer to earn extra cash. There are also side jobs you can pick up from home, like selling old clothes online or renting out a room on Airbnb.

If taking a second job sounds exhausting, make it a short-term stint to earn enough for a few extra payments toward debt. There are quite a few side hustles you can consider.

Get inspired: By age 23, Michelle Schroeder-Gardner had three college degrees, a new husband, a house in Missouri and $38,000 in student debt. She was determined to pay it off as quickly as possible.

Her strategy? Earn more. “Cutting your budget is great, but there’s only so much you can cut,” she says. \”You can always try to make more money.\”

In addition to her day job, Schroeder-Gardner ramped up several side hustles, including writing a blog, selling items from around her house, taking surveys and being a mystery shopper.

The long hours — up to 100 per week — were tough. But “just watching my debt go down kept me motivated, because I could see the end goal,” she says.

Align Your Spending and Values

Do it yourself: Avoid falling into big-spender territory by heeding signs of overspending. If you find yourself falling behind on savings goals, buying items out of boredom and breaking your own spending rules, you might be overspending.

But you can break the cycle by building a good budget, analyzing your credit card statements and working to build new habits, like cooking at home instead of eating out.

Get inspired: Like many people trying to keep up an “appearance of having it all,” Lauren Greutman and her husband, Mark, bought an expensive home, drove luxury cars and spent freely. When Lauren found herself hiding $600 worth of new clothing from her spouse, she admitted the spending was out of control.

“I racked up $40,000 worth of debt behind my husband’s back and had so much shame,” she says.

In addition to downscaling their lifestyle, the Greutmans made a breakthrough when they assessed their spending in light of their values. Lauren’s advice: Make a list of everything you value in life and then list all your spending from last month. If the lists don’t match, get your spending in line with your values.

Use the Power of Extra Payments

Do it yourself: Use the calculator on the debt payoff guide to see how extra payments can shorten your payoff time.

Making extra payments each month on your debt can also lower your credit utilization ratio, which in turn can improve your credit score.

Get inspired: No amount of debt is comfortable for Jackie Beck. When the amount she owed hit $147,000, including a mortgage, student and car loans, and credit cards, she became obsessed with paying it off — all of it.

She did so largely by making extra payments toward her bills. “I became consumed with paying off my student loan. I earned extra money — through online surveys, freelance writing and odd jobs from Craigslist — so I could make small additional payments,\” she says. \”I figured out how much faster I’d be done each time I sent in even a tiny payment.”

Rely on Yourself

Do it yourself: Could a side business give you extra income to pay off debt? Think about your interests and how you might make a small business out of them. An animal lover could open a mobile grooming service, for instance, or a writer could pick up some freelance work.

Get inspired: After a divorce, Carrie Smith Nicholson faced $14,000 in car loan and credit card debt, an amount that triggered a resolve to alter her financial situation.

“I was on my own for the first time in my life and … could barely afford a decent apartment. There was no one around to help me out of this financial hole, so I knew I had to help myself,” she says.

Nicholson took a second job at a tax office, working nights and weekends, and lived on two-thirds of her income. “During tax season I worked seven days a week without any vacations or time off. It was tough, but I had a goal to be debt-free within a year,” she says.

Now debt-free, Nicholson continues to lean on herself, managing a blog that provides her main source of income.

Consider Consolidation

Do it yourself: Learn about debt consolidation and whether it makes sense for you. You might be able to use a balance transfer credit card or a debt consolidation loan to roll multiple debts into one, ideally with a lower interest rate. Note that you’ll likely need a good credit score to qualify.

Get inspired: When David Weliver had to decide whether to pay his rent or his credit card bill in his 20s, he felt immense guilt. “After years of carrying obscene amounts of debt, it was the first time I couldn’t meet a payment obligation,” he says.

To tackle his $80,000 in student loan, car loan and credit card debt, Weliver set up a plan that included debt consolidation. His credit union gave him a low-rate loan for around $5,000. He was able to get another loan for $12,000, at a favorable interest rate, to pay off his highest-interest credit cards.

“I made the fixed personal loan payments, and whatever was left over I put toward the higher-rate APR cards, which I paid off before the lower-rate cards,” he says.

Eventually, the strategy paid off. “I was able to pay off all of my debt in a little over three years,” Weliver says, “and I’m very glad I got out of debt at the stage of life that I did.”

Know your ‘why’

Do it yourself: Think about your financial goals in the near and long term. Whether you’re looking for a new house or saving up for a vacation, having a clear motivation to get out of debt will help keep you on track.

Get inspired: Brian Brandow’s debt epiphany struck in 2010 when he told his family there would be no vacation that year. Instead, it was time to face $109,000 in debt, including five maxed-out credit cards.

The Brandows created a budget, cut expenses and used a debt management plan, eventually becoming debt-free after 50 months of repayment. Brandow’s three children provided the motivation he needed to stay focused on debt repayment.

“I didn’t want to disappoint my family,” he says. “I wanted to provide better for them.

\”You’ll need to have a clear reason to want to get out of debt, because it’s going to be hard. It will take sacrifice. You must be mentally prepared. Having a ‘why’ will help keep you motivated.”

What Is Debt and How to Handle It

Debt is money owed by one party to another. How best to handle your debt depends on the type of debt you have.

At its simplest, debt is defined as money owed by one party to another. But it can get complicated fast. Depending on your circumstances, debt can be a useful financial tool or baggage complicating your life.

The best way to handle your debt depends on what kind of debt you have and how much you owe. If you have too much debt, you may need to find debt relief. Just be wary of any company that over-promises or sounds too good to be true, such as debt forgiveness.

Below we break down the various forms of debt and how to handle them.

Secured vs. Unsecured Debt

There are two types of debt: secured and unsecured.

Secured debt means the borrower has pledged an asset as collateral for the loan. Auto loans and mortgages are common examples of secured debt. If you fail to repay as agreed, the creditor can seize the asset, for instance repossessing a car or foreclosing on a house.

Unsecured debt, on the other hand, is not backed by an asset. A common example is credit card debt. However, that doesn’t mean you get off scot-free if you fail to repay.

A credit card issuer, for instance, will likely sell your delinquent debt to a third-party debt collector, which may then hound you for payment. If you don’t pay the debt collector, it may sue you for payment, which can lead to wage garnishment. Some really aggressive original creditors may sue you directly, without using a collection agency.

Credit Card Debt

Credit card debt is among the most common — and most expensive — form of unsecured debt.

Americans\’ total credit card debt reached an estimated $416 billion in 2020, according to NerdWallet’s annual American household credit card debt study. Among people with revolving credit card debt, the average amount owed was $7,027.

Depending on your personal credit score, the annual percentage rates, or APRs, on your credit cards can be in the teens and 20s. Not paying off your full balance each month can get expensive, fast.

If you’re having trouble paying off your credit card debt, here are a few ways to handle it:

  • Consider a debt management plan from a nonprofit credit counseling agency.

  • If you have multiple debts, see if you can consolidate them.

  • Look into a 0% intro APR balance transfer credit card.

  • Talk with a bankruptcy attorney to explore your options.

Medical Bill Debt

Medical bill debt can come from a routine visit to your doctor, or from an unexpected event like a broken bone or hospitalization. This type of debt can be expensive and, further complicating matters, there\’s not a clear-cut way to handle it if you can’t afford to pay it off all at once.

Here are a few ways to pay off your medical bills:

  • Set up a payment plan.

  • Use a medical credit card.

  • Hire a medical bill advocate.

No matter how strapped you are for cash to pay your medical bills, avoid putting the medical bill on a credit card. Most medical providers don’t charge interest; moving that debt to a credit card wipes out that advantage and can make it more expensive.

Student Loans

If you graduated from college in the past few years with student loan debt, chances are you’re carrying a sizable balance. On average, U.S. households that had student debt in 2020 carried a balance of $56,572.

Student loans are either federal or private, with a variety of loan types between the two. Regardless of where the debt came from, you’ll likely be paying your student loans off for years to come.

You have a few ways to get help with student loan debt:

Be wary of any companies that promise full debt relief help — many are scams.

Personal Loans

Personal loans can help consolidate credit card debt or provide cash flow for a specific reason, like a home remodel. Loan terms are generally two to five years, with interest rates that range from 5% to 36%.

If you’re having trouble paying back your personal loan:

  • Call the lender to see if you can defer payments or go on a hardship plan.

  • Consult the free help of a nonprofit credit counselor to better manage your budget.

  • Talk with a bankruptcy attorney if you’re facing too much debt.

Car Loans

Car loans are a form of secured debt, meaning that if you don’t pay, the lender can take back the car that serves as collateral. Car loans are growing longer and more expensive. This can make them harder to pay off, especially if your budget is tight.

Here’s how to handle an expensive car loan:

  • Refinance the loan.

  • Downsize your car for a less expensive one.

  • Find a way out of the loan.


Getting a mortgage is likely the biggest personal finance decision you’ll make. They generally last decades and cost hundreds of thousands of dollars. In 2020, the average American carried a mortgage balance of $190,595, according to NerdWallet’s debt study. A mortgage is a secured loan, meaning the bank can take your house if you don’t pay as agreed.

But you have some recourse if you’re having trouble paying your mortgage:

  • Consider refinancing your mortgage.

  • Take advantage of the Home Affordable Refinance Program.

Business Debt

Debt is often a necessary part of keeping a small business running. You can take out a loan or business line of credit to hire more employees or purchase new equipment.

But too much debt can put a crimp in your business cash flow and potentially put your business at risk.

If you’re facing steep debt, there are several ways you can get your business out of debt. They include:

  • Boosting your sales.

  • Refinancing or consolidating your high-interest business debt.

Collections Accounts

It\’s common to have an account in collections. About 28% of consumers with credit files do, according to a 2020 report from the Consumer Financial Protection Bureau.

Knowing how to handle a debt in collections can be tricky, though. Here are some steps to follow if you’re being hounded by debt collectors:

  • Brush up on your debt collection rights.

  • Don’t give in to pressure to make a quick payment.

  • Gather information on the debt.

  • Make a plan to handle the debt in collections — options include creating a payment plan, settling the debt or paying it in full.

Try This 11 Word Phrase to Stop Debt Collectors (Proven to Work)

You may have heard of the 11-word phrase (“Please cease and desist all calls and contact with me, immediately”) used to stop debt collectors if you are dealing with debt and have received calls from debt collectors.

However, what exactly is the 11-word credit loophole and how effective is it? What can you say to fend off obnoxious debt-collecting calls?

Get answers to these and other questions in this guide to preventing collection calls.

Read on as we throw more light on this.

Origin of the 11-Word Phrase

In an interview with credit expert John Ulzheimer on Larry King’s show, where he was promoting the book “Credit Secrets,” published by Scott and Alison Hilton, the 11-word phrase to thwart debt collectors was first stated.

Page 43 of the book, according to Ulzheimer, contains a “simple 11-word phrase you can employ to ensure that no bill collector will ever approach you again.”

The debt collector cannot even call your phone number, he continued, because of this one statement. That is untrue.

His remark about the interview caused hordes of debtors to desperately look for the precise 11-word sentence.

Actually, it was only a publicity stunt to increase the book’s sales.

What Does the Law Say About Calls From Debt Collectors

The Fair Debt Collection Practices Act was created by the federal government to protect your rights as a consumer and counter the lengthy history of abuse by debt collectors.

The fair debt collection act defines what is legal or not as regards debt collection.

Debt collectors are permitted by the Fair Debt Collection Practices Act to contact you by phone and mail once each day, but they are not allowed to harass you or use threatening, insulting, or abusive language.

Additionally, they might not call you after hours or on weekends.

Most importantly, the law mandates that debt collectors must comply with your request if you ask them to cease contacting and only communicate with you in writing.

Why Are Debt Collectors Calling Me?

Your debt collection agency will be notified if you don’t pay your invoices on time.

Following this, by law, debt collectors are permitted to contact you by phone between 8 a.m. and 9 p.m. to obtain payment for the debt.

Some debtors send your debt to a third-party collection agency, while others utilize their internal debt collectors.

In order to recover unpaid taxes, the Internal Revenue Service (IRS) also introduced a private debt collection program in 2016. Congress imposed a mandate on this program.

Debt collectors can phone you to enquire about who owes you money, but they are only permitted to do this once.

How to Stop Communication With Debt Collectors on Your Own

Telling debt collectors the 11-word command, “Please cease and desist all calls and contact with me, immediately,” is the first step in stopping them from calling you.

To make it more official, you should send the collection agency or creditors a demand letter outlining the need for them to immediately stop communicating with you.

Declare firmly that you don’t want the agency or creditor to call you again, regardless of the circumstance.

According to the FDCPA, your collector or creditor must comply with your written request.

But if they continue to approach you after you’ve sent the demand letter, you should now file a lawsuit.

You can make a complaint with the CFPB, BBB, or FTC here, as well as with your attorney general, to report the collecting agency:

Other Ways to Prevent Loan Sharks From Contacting You

Some other ways to Prevent debt collectors from contacting you include:

  • Verify your debt by requesting a debt validation letter from the collection agency.
  • Confirming the statute of limitations on the said debt. Debt collectors are not legally allowed to collect old debts. Typically the statute of limitations for most states is between 3 and 6 years.
  • Enrolling in a debt management program: Debt management programs assist debtors to reduce their monthly payments and fees and act as mediators between debtors and collectors.

Can You Ignore Debt Collectors?

Ignore debt collectors at your peril. Although not a good idea to ignore them, debt collectors can be ignored.

Ignoring debt collectors who are approaching you about a bill you owe won’t make it disappear. It also won’t prohibit debt collectors from getting in touch with you.

Debt collectors will use additional strategies to contact you if you ignore them or avoid them, including suing you.

Final Thought

It’s a fallacy that saying that 11-word phrase will stop debt collectors (unfortunately). It originated from a promotional interview for a book about credit.

We believe that this piece was helpful, if you think so too, please share it across your social media platforms.

Top 5 Tips for Paying Off Debt Quickly in 2023

With 80% of Americans dealing with some kind of debt, you’re not alone if you’re struggling to pay off loans or credit cards. It can be frustrating to balance paying off debt with the life you want to live, but it’s necessary. With a few small changes, you can pay off your debts without upending your entire life.

Here are 5 tips to help you pay off debts ASAP.

1. Do Some Budgeting

When you’re faced with a big wall of debt, it might seem difficult to imagine overcoming it. However, with some diligent budgeting, you can pay off your debt without upsetting your quality of life too much. No matter how big your debt is, you can find a way to start working on it.

It’s intimidating to think of owing many thousands of dollars to someone when you’re not bringing that much in on a monthly basis. Since you can’t go backward, you need to face what’s in front of you figure out how to budget.

If you’re like most people, your biggest expenditure is your housing costs. When you’re talking about rent, cable, internet, electricity, and gas, you’re not talking about a lot of extra spending but you can make efforts here and there.

For people with a big cable package, think about scaling it back and cutting out some extras you don’t need. If you’re only reading emails and watching the occasional YouTube video, you don’t need the highest speed internet available.

Make an effort to cut back on heating and cooling costs with more or less clothing where appropriate. It’s a tough struggle, but with some small changes, you could end up keeping your quality of life while paying off debt.

2. Take a Vacation From Vacations

If you’re trying to pay off your debt, you might be working more hours than you’d expected. You could be stressing out trying to balance your work and life while you make generous payments to your lending institution. Stress could build up and make you want a vacation more than ever, but now is the time when you need to be creative.

You can’t take vacations when you’re drowning in debt. However, if you’re stressed out and tired, you could experience burnout. To balance your stress and your need for relaxation, put together some low-cost local solutions or “staycations”.

If there’s a nice wooded area where your friend has a cabin or where you can pitch a tent, make a date to head out there for a night later in the month. You need to have one full day where you can check out, but you need to do it for cheap. Even a day trip to the beach is a smart way to get out of your headspace without having to pay for a flight.

You can still take time off, but you need to make the most of it so that when it’s time to work, you can focus on what you need to do.

3. Consolidate Your Debt

Some people have multiple debts from many sources. You might have debt from one institution that charges 10% APR while you have another that charges you 20%. If they’re about the same amount, you should consider consolidating those loans together.

If you consolidate your debt, you could be paying a much smaller APR and manage your loans with one financial institution.

When you’re paying off debt to multiple institutions, it’s easy to start to get mixed up and forget to pay one or the other. When you have one institution to pay back, you won’t make any mistakes.

It’s also nice to have one institution to deal with in case you have trouble paying your loan back. If you’ve been a good and responsible client, they’ll work with you to get you back on track.

For some more tips on consolidating debt and paying it off, check out more on debt management.

4. Focus on Low Hanging Fruit

You need to prioritize your debts when it comes to paying them off. Along with the principle, you need to consider the hassle of the interest as well as any fees you incur over time.

If you’ve got several small debts that you could pay off in under two months, focus on them. Get them out of the way to focus on your biggest debts.

If you aren’t able to consolidate your debts, make sure that you’re paying attention to interest rates. If the smallest debt you have has a rate that’s three times your largest debt, you need to get that small debt taken care of. If the interest starts compounding, you’re going to be up the creek without a paddle.

5. Pick Up Extra Work

It goes without saying, but to pay off debt, you’re going to have to work extra hard. If you have any extra time at all, you should consider picking up some extra work. Rather than have this debt hanging over your head for the next few years, one rough summer that digs you out of debt might be worth the hassle.

If you’ve got any kinds of skills that you’re not using at your job, now’s the time to dust them off. For people with talents in cooking, crafting, or handiwork, there’s plenty of side jobs you could do. You could work evenings in a restaurant, help a friend to support their small business, or help do small repairs around a neighbor’s house.

Paying Off Debt Doesn’t Have to be Painful

With the right amount of adjustments and reconfiguring, you won’t have to upset your entire life to pay off your debts.

Paying off debt feels good because you know as soon as you’re finished, you can get on with building the life you want to live.

Get off My Back! How to Deal with Debt Collectors

Are you receiving harassing daily calls from collection agencies asking for payments? Maybe your account isn’t yet in collections but the credit card company is beginning to call on a regular basis.

Whatever the case is, you are beginning to wonder about how to deal with debt collectors. These companies can be ruthless, some going as far as showing up at your work or home.

We’re going to discuss how you can deal with these people and what you can legally do to get them off your back! Keep reading for more information!

Don’t Ignore the Problem

If you are receiving several calls per day from multiple lines or daily letters, it is easy to ignore these collectors by blocking the number or returning the mail. This is one of the worst things you can do.

Instead, attempt to communicate with these agencies and work out a payment plan. Also, look into your rights as a consumer. These companies don’t always follow the law which can ultimately work in your favor.

Hire an Attorney

Collectors can sue for unpaid debts. Some of these debts are not within the statute of limitations or the agency can’t always prove that you owe them. Agencies also have a habit of breaking federal guidelines while trying to collect debts.

To protect yourself from debt collection a lawsuit that counters theirs with allegations of unfair, deceptive, or illegal collection techniques can help. This counter suit will not erase the debt, but any settlement may be put toward your initial balance.

Also remember that once you have an attorney, collections agencies are not to contact you. All communication must be handled through your lawyer.

Protect Your Accounts

If you choose a payment plan, avoid paying your monthly note with a debit or credit card. Also, do not give the agency permission to withdraw funds directly from your account.

These collectors can be ruthless and if you fall behind, they can use your information to continue to withdraw money. Even if you revoke the collector’s ability to withdraw funds, this is not a guarantee that collection attempts will stop.

Continued collections after the revocation of access to your account are illegal but it happens often. You will have to file paperwork at your bank to block withdrawals from these companies

The ideal way to make any payments is through a third-party service or money order. This ensures that your accounts remain safe and your necessities (food, medicine, rent, and utilities) get paid.

How to Deal With Debt Collectors: Final Tips

Chances are, you will have contact with at least one debt collection agency. It is easy to get frustrated and angry with the person calling you. Explaining your situation is a good idea and may make the agency more willing to compromise.

The worst thing you can do is get overly irate, use profanity, or agree to a payment plan with no intention of following through. All calls are recorded and behaving in this manner will do nothing but hurt your case if you receive a summons to court.

If you enjoyed this article and would like more information about how to deal with debt collectors or other legal and financial matters, check out the rest of our site!

Is Debt Consolidation a Good Idea? What You Need to Know

Americans currently have $12.58 trillion dollars worth of debt. Out of that amount, $412 billion is seriously delinquent.

There are a few ways we can work down that debt. We can find part-time work, sell off items we no longer need or declare bankruptcy.

We can also consider debt consolidation. There are pros and cons to debt consolidation. The cons often leave people wondering, is debt consolidation a good idea?

If you want to find out the answer to how does debt consolidation work, keep reading. We’re sharing with you everything you need to know to make an informed decision about your finances.

What Is Debt Consolidation and Is Debt Consolidation a Good Idea?

Debt consolidation is the act of rolling all of your high-interest debts into a single payment with a lower interest. Doing so can often help reduce your total debt.

Debt consolidation also reorganizes your debts in a way to help you pay it off more quickly. There are a few ways you can consolidate your debt.

Transfer Debt to One Credit Card

You can apply for a 0% interest, balance-transfer credit card. However, you will need to pay off the entire balance before the promotional period ends.

Debt Consolidation Loan

Debt consolidation loans can also help you pay off your debts. You’ll then pay back the loan in installments over a set period of time.

Other Options

You can also take out a home equity loan or a 401(k) loan. However, there is much risk involved in these types of loans.

You may end up losing your retirement funds or worse, your home.

When Debt Consolidation Is a Good Idea

Is debt consolidation worth it? In certain scenarios, yes. But before you make any final decisions, crunch the numbers first. If the math works out, debt consolidation may be worth it.

Also, if you’re struggling with your debts and can’t negotiate lower interest rate terms with your credit card companies or creditors, debt consolidation may be the best option for you.

Debt Consolidation Turns Many Bills into One Lump Sum

Debt consolidation is also a good idea for people who are struggling with:

  • High-interest rates
  • High monthly payments
  • Too many bills

How does debt consolidation work? By combining them all into one bill, you’ll have a lower interest rate and a lower monthly payment. You may even be able to pay off your debts at a fraction of the cost.

When Transferring Your Debt to a New Credit Card Won’t Work

Transferring your debt to a credit card doesn’t work if your debt exceeds the credit limit. In other cases, the card issuer may not allow you to transfer the amount you need to a card.

Some credit cards place restrictions on what kinds of debt you can transfer to a card. And if you don’t pay off the balance by the time the introductory offer expires, you could find yourself paying more than you would for a loan.

When Debt Consolidation Isn’t the Best Choice

Does debt consolidation work? Not always. Here are a few times when debt consolidation isn’t the best choice.

Can’t Get a Lowered Interest Rate

Debt consolidation loan companies look at the following factors:

  • Credit history
  • Income
  • Expenses
  • Debt

All of these help lenders decide if you’re a good risk. If your credit rating isn’t good, the lender may charge higher interest rates.

If you can’t lower your interest rate, there’s no point in getting a new loan. You’ll end up paying more in the end.

You Plan to Continue Spending

Debt consolidation of any sort doesn’t work if you don’t incorporate good spending habits into your lifestyle. If you transfer your credit card debt to a debt consolidation loan and then continue to use your cards, you’ll end up with an even worse financial situation.

If you’re worried you might do this, try creating a budget and living on it for a few months before you take out a loan. If you can stick to your budget while making monthly payments, a loan may be a good idea.

You Can’t Afford the Monthly Payments of a Debt Consolidation Loan

If your debts are so high that even consolidating them won’t make then affordable, you may want to consider debt settlement, credit counseling or trying to get your lenders to work out a more affordable payment plan.

You’re Worried About Your Credit Score

Any form of debt consolidation impacts your credit score. In most cases, it’s a negative impact.

That’s because older accounts have a more positive impact on your score because it shows a history of creditworthiness. By consolidating your debts, you close those accounts and replace them with a new account.

If your score is already decent and you can manage monthly payments, you may want to explore other options.

You Have to Pay Off Your Debt Consolidation Loan Quickly to Save Money

Before you agree to any type of debt program, do yourself a favor by digger a little deeper so you understand all the terms and potential fees. Find out if the interest rate is introductory.

If it is an introductory rate, find out when it expires and what the new interest rate will be. Do some math to figure out how many years it will take you to pay off your debts. Then calculate how much you’ll have paid out in interest by that point.

Ask About Possible Penalties

And always ask if you’ll be penalized for paying off your debts early. You should also find out what the penalties are for any missed or late payments.

Think about your future. If you know of any upcoming changes such as an addition to the family or you’re starting your own business, what seems like a good idea today may not work out so well in a year or so.

Keep Learning

Is debt consolidation a good idea? Only if you’ve done some research first and you have the money to pay down your debts.

Only you can decide that. In the meantime, keep learning so you know how to make better financial decisions

Stress Over Debt?: How to Get Rid of Student Loan Debt

Over half of young adults that went to college in 2018 took on debt. If you are one of the many people that have student debt, it can be very stressful to be under the weight of paying off thousands of dollars in debt from going to school.

We are here to help you see the light at the end of the tunnel. Continue reading this article to learn how to get rid of student loan debt.

Student Loan Repayment Assistance

One of the things that will become more popular is student loan repayment assistance programs. Many employers that are competing for top talent will offer these programs as a benefit to get people to come to work for their company. If you can find an employer that offers this as a benefit, you might be able to get a chunk of your loans repaid.

Enroll In Income-Driven Repayment

Do you feel like you’re drowning under the weight of the debt you owe for student loans? If you don’t feel like you can afford what you have to pay for your student loans, you can apply to lower your payments according to your income.

There are different types of repayment plans available depending on your situation, so make sure to check into every option.

Qualify for Federal Student Loan Forgiveness Programs

If your student loans are through the federal government, you might be able to qualify for federal student loan forgiveness programs. There are different programs, but one of the most popular programs is the Public Service Loan Forgiveness program. Under this program, if you work in public service for 10 years, your loans can be forgiven.

Consolidate Your Student Loan Debt

While consolidating your student loan debt isn’t going to make it go away, it can make it easier to manage. Instead of trying to figure out what you owe and when you owe it, you’ll be able to have one loan and can easily see the balance.

If you find that you miss payments a lot because you can’t keep track of your loans, this might be a good option for you.

Refinance Your Student Loans

If you have private student loans, instead of continuing to pay high-interest rates, you might be able to refinance your loan to get a better interest rate. If you can get a lower interest rate, your payment could be a lot lower, or you could continue to pay the bigger payment and pay off your loan a lot faster.

Make sure the new interest rate is low enough that it is worth the trouble of refinancing your student loans.

Now You Know How to Get Rid of Student Loan Debt

Now you know how to get rid of student loan debt. With the information you have, you can start working toward your financial freedom from student loans.

Do you want to learn more about personal finance, education, and other important topics? Keep reading our blog to get the information you need.

How Can I Get Out of Debt Without Filing Bankruptcy

Do you feel weighed down by debt? Do you feel like you need a way out of your debts, but don’t know how to get out of debt without filing for bankruptcy?

Though the bankruptcy process can be long and complicated, filing for bankruptcy isn’t your only option. You can get out of debt without filing for bankruptcy, but you may need some help from a professional.

So, you might be asking, how can I get out of debt without filing bankruptcy? Keep reading to learn more about why you shouldn’t consider bankruptcy as your final debt solution.

1. Make a Budget

Making a budget can be a great starting point for getting out of debt without filing for bankruptcy. A budget gives you a clear understanding of where your money is going so that you can adjust your spending and start reducing your debt. Make sure you are tracking all of your expenses, including:

  • groceries
  • living expenses
  • entertainment
  • gas

Once you have all of your expenses tallied up, you can set a goal to reduce your spending and figure out how much money you can put toward paying down your debt each month. Having a budget in place will also allow you to make informed decisions about taking on another job to help pay down additional debt. By setting a budget and following it consistently you can get out of debt without filing for bankruptcy.

2. Prioritize Debt Repayment

The best way to get out of debt management without filing for bankruptcy is to prioritize debt repayment. To begin, assess your debt situation and separate your debts into secured and unsecured debts. Secured debts include things like:

  • mortgages
  • car loans
  • home loans

Unsecured debts include things like medical bills and credit card debt. Next, make the minimum payments on all of your debts and then focus on paying off your high-interest debt first, as this can save you money in the long run.

Once you’ve paid off one debt, apply the amount you were paying towards that debt to the next highest-interest debt. Although this approach takes some time and discipline, paying off your debt without filing for bankruptcy will preserve your credit score and save you money in the long run.

3. Focus On Spending Reduction

One way to get out of debt without filing for bankruptcy is to focus on spending reduction. This involves taking a hard look at your spending habits and getting rid of unnecessary expenses. Start by making a list of all your expenses so that you can prioritize which ones to cut out and which ones you need to keep.

Then, create a budget that will help you stay within your means, whether it’s cutting out eating out or shopping trips, or getting a second job. Once you’ve identified your financial weaknesses, you can start looking for ways to save money and put more towards your debt.

Additionally, you can look into refinancing with a lower interest rate and longer terms to help lower your monthly payments. Lastly, consider talking to a financial advisor who can help you strategize your debt repayment plan.

4. Negotiate Interest Rates

It is important to understand the terms and conditions of your loan before attempting to negotiate with creditors. Before calling a creditor, analyze your payment history and find a realistic payment plan that is both manageable for you and attractive to the creditor.

Contact your creditors to explain your situation and ask for lower rates. Take into consideration that creditors may consider giving you a break on interest rates if you make efforts to pay a one-time fee or a higher monthly payment that will help pay off the debt faster.

This could be a great way to reduce the overall balance and save money on interest charges. When talking to creditors, be honest about your circumstances and be sure to follow up with any promises that you make. Negotiating interest rates can be a viable strategy to get out of debt without having to declare bankruptcy.

5. Utilize Balance Transfer Credit Cards

Debt can be a daunting challenge to face. Filing bankruptcy is often seen as the only way out of debt, but it doesn’t have to be. Utilizing balance transfer credit cards can be a common tactic for managing debt, without filing bankruptcy.

Balance transfer credit cards allow you to transfer your debt to the card and often have a promotional period. Where you can only pay minimum payments or no interest at all.

Once the promotional time frame ends, you can still pay the rest in full to save money and stay out of debt. Utilizing balance transfer cards can help you get the debt relief you’re looking for and stay out of bankruptcy.

6. Use Debt Relief Options

Some of the most common debt relief options include:

Consolidating your debt into one manageable loan may reduce your monthly repayment and potentially reduce the amount owing. Refinancing involves taking out a new loan with a lower interest rate and using it to pay off the old debts.

Negotiating with creditors can also provide a way to avoid bankruptcy. You may be able to negotiate a reduced payment plan, or interest rate, or negotiate for the entire debt to be written off.

Finally, consider the IRS debt forgiveness program. The programs may include but are not limited to, an offer in compromise, an installment agreement, and a partial payment installment agreement.

Getting Answers: How Can I Get Out of Debt Without Filing Bankruptcy

Still asking, how can I get out of debt without filing bankruptcy? There is hope to get out of debt without filing for bankruptcy. By applying the tips listed, such as budgeting, pursuing a side hustle, and practicing financial restraint, you can successfully manage debt. Take your first step today and begin your debt repayment plan.

If you found the information above helpful, please feel free to explore the rest of our blog for more great content.

Coffee Break Loans: Legit or Scam? [September 2023 Review]

Sometimes, life can become challenging when financial issues arise and you find yourself without any source of funds. Coffee Break Loans is aware of these situations and understands that unexpected expenses can come our way.

This understanding led them to establish their company, offering fast and convenient loan options tailored to your specific needs.

The name Coffee Break Loans conveys a powerful message: it signifies their energetic and swift approach to securing a loan for you. You can complete a loan application in no time, just like finishing a cup of hot coffee.

Coffee Break Loans is part of our regular reviews of short-term loan providers. Now, let\’s examine how it compares to others in the industry.

Coffee Break Loans Connects Borrowers With Lenders

Coffee Break Loans is not a lender but a service that helps you find loans. It has a network of direct lenders who offer loans to people with all kinds of credit backgrounds. The loan amount you can get through this service can be anywhere between $500 and $5,000.

While Coffee Break Loans mainly focuses on personal loans, it can also help you find other types of loans if needed. Once you receive the loan, you can utilize the funds as per your requirements.

By using Coffee Break Loans, you don\’t have to search and apply to individual lenders. The service gathers most of the necessary information that lenders require and shares it with their network of lenders.

Within minutes of submitting your application, one or more lenders may respond and provide you with the money you need, often as quickly as the next business day. This arrangement offers you the benefit of speed and convenience.

Before choosing a service, it\’s advisable to check their rating with the Better Business Bureau and other review sites. Look for feedback from actual customers as they can provide insights into where a service excels or falls short. Additionally, make sure to review the minimum and maximum loan amounts, income requirements, and the types of loans available from each service.

WATCH THIS! – Coffee Break Loans Reviews

Coffee Break Loans Advantages

  • Those in need of money might avoid a drawn-out or demanding process by applying for it on the aforementioned website.
  • Its affiliated lenders only award loans after carefully examining the borrower’s information.
  • When applying for a loan, the borrower is given a thorough summary of all the pertinent details.
  • They even allow the borrower to speak with the lender directly and get all of their questions answered.
  • Loans are available to consumers starting at $500.
  • They have also done away with a lot of the paperwork required to have a loan accepted.
  • The topic of whether coffebreakloans are legitimate or not is further answered by the fact that they offer the highest level of safety and security to users enrolled on the website.
  • To better prepare the borrowers, the website even offers a list of the factors that the majority of lenders consider before approving a loan.
  • The lender deposits the money released into the borrower’s bank account.
  • By turning on the auto repayment feature, borrowers who want to pay back the loan on time can do so.

Coffee Break Loans Disadvantages

  • When it comes to financial matters, people frequently require extra encouragement to believe sources who provide a guarantee.
  • Similar to banks, it may be difficult for people to trust lenders they have never met or who are not recognized by the State.
  • Even though there is a list of requirements for loans on the website, it might not be helpful because each lender has different requirements.
  • Under such a loan-giving process, there is a potential that a borrower will be taken advantage of because lenders may demand a higher interest rate and/or act without supervision.
  • No customer service is present, and there is no platform on any social media page where you may contact them and learn more about their success rate.


FAQs About Coffee Break Loans

Coffee Break Loans might not be a familiar name to you, as it has been around for just a year. To provide you with a better understanding of how Coffee Break Loans works, here are responses to some frequently asked questions.

How Do I Apply?

You can easily complete and send a loan application on the Coffee Break Loans website within just five minutes. The necessary details you\’ll need to provide are as follows:

  • Name and address
  • Phone number
  • Email address
  • Bank or credit union routing and account numbers
  • Driver license number and state
  • Employment and income
  • Social Security number
  • Next payday and frequency

Coffee Break Loans will assess your loan application by confirming certain essential details. In order to qualify for a loan, the majority of lenders affiliated with Coffee Break Loans require you to:

  • Be employed at your present job for at least 90 days.
  • Be a US citizen or a permanent resident over the age of 18.
  • Have a minimum income of around $1,000 per month after tax deductions.
  • Have a checking account in your name.
  • Provide a working telephone number for your home and work.
  • Provide a valid email address.

Coffee Break Loans does not perform a hard credit check during the prequalification process, although direct lenders will usually do so. If you successfully prequalify, you should hear from one or more lenders willing to work with you. Coffee Break Loans may forward you to a lender’s website where you can finish the application process, including by:

  • Providing any additional required information
  • Supplying documents verifying your employment, income, and other items.
  • Permitting the lender to perform a hard credit check. This may have a small impact on your credit score and remain on your credit report for two years, but other factors may mitigate any harm. The lender will also ask permission to take automatic payments from your bank or credit union account.
  • Reading and e-signing any loan agreement you receive. The lender will specify the loan amount, loan term, payment size, origination fee, late fee, and interest rate.
  • After final approval, the lender will directly deposit the loan proceeds into your bank account, usually by the next business day.

When you share your information with Coffee Break Loans, all the lenders connected to their network can access it, which helps speed up the entire process. If you agree, the lender will automatically deduct the necessary amount from your bank account on each payment date. Alternatively, if you prefer, you can choose to send a monthly check or make an electronic payment before the due date to avoid any penalties.

If your loan payment is 30 or more days delinquent, the lender will probably report you to one or more major credit bureaus (i.e., TransUnion, Equifax, Experian). This can harm your credit score and remain on your credit report for up to seven years.

What Interest Rates and Terms Can I Expect?

Coffee Break Loans states that the maximum APR on the loans it arranges is 35.99%. Direct lenders on the loan network decide the amount to offer and the loan term based on your income and credit history. Loan amounts range from $500 to $5,000.


Although most Coffee Break Loans are unsecured, you may have another loan option: a secured loan from a network lender. In return for collateral, a secured loan (for example, a home equity loan or an auto loan) is much easier to obtain than an unsecured loan and should have a lower interest rate.

Unless otherwise specified, you will repay your unsecured loan in equal monthly payment installments. Coffee Break Loans does not participate in any financing and has no input into the terms.

Its financial services are free, but direct lenders may charge an origination fee (usually between 1% and 10%) in addition to monthly interest. Any fees (such as a late fee) appear in the loan’s APR.

Can I Get a Loan from Coffee Break Loans If I Have Poor Credit?


The Coffee Break Loans network lenders deal with all credit scores from excellent to bad. You can get a loan with poor credit but expect to pay a relatively high interest rate and fees. If you have some discretion over the timing of the loan, you can improve your approval chances by adopting habits that raise your credit score.

You can develop good credit by paying your bills on time, keeping your credit utilization ratio (i.e., credit used / credit available) below 30% but even lower for the best scores, and removing any derogatory mistakes on your three credit reports. You can clean up your credit reports yourself or hire a credit repair company to do the work for you.

WATCH THIS! – Coffee Break Loans Review

How Is My Private Information Used?

The following chart summarizes how Coffee Break Loans uses the data it collects. As you can see, it will share virtually all your data with lenders, lender networks, and other marketing partners. These terms are customary for lending networks.


If you live in California, you have the right to opt out of the sale of your personal information. Residents of the other 49 states can limit data sharing by emailing the company at [email protected].

Is Coffee Break Loans Legit?

Coffee Break Loans appears to be a legitimate loan option based on the following evidence:

  • A website active for more than one year
  • An A+ rating from the Better Business Bureau. Trustpilot is yet to review the company.
  • A secure, well-designed website that uses an extended SSL certificate and 2048-bit encryption
  • The site has About Us and Contact Us pages

On the negative side, does not have a presence on social media sites such as Facebook, Twitter, or Instagram.

As far as the legitimacy of the lenders on the Coffee Break Loans network, the company reveals:

“ receives compensation from its lenders and lending partners, often based on a ping-tree model similar to Google AdWords where the highest available bidder is connected to the consumer… uses commercially reasonable efforts to ensure that the information on this Site is accurate, but accuracy is not guaranteed. makes no representations regarding your use of this Site or results that you may or may not obtain through such use.

This is standard language for online loan-finding financial services.

Is Coffee Break Loans Safe

Yes! A coffee break loan allows people to take a break from work without going over their budget. The Coffee Break Loans website also seems to be authentic! This is due to the business’s nine (9) years of operation and its respectable rating on the most well-liked websites on the internet!

Who is the Owner of Coffee break loans ?

Because the creators of this website chose to keep the identity of the owner of Coffee Break Loans private, no one is now aware of their identity.

Lender Networks Help Consumers Who Need Fast Cash

Lending networks save you time when you need emergency funds. Coffee Break Loans is a relatively new entrant in this field, with very few online comments from users. Its website has a professional look and feel to it.

Given its A+ rating from the BBB, we believe Coffee Break Loans works well, and you should have no problem including it on our list of reputable financing networks.

Final Words

If your search for information about personal loans is not yet complete, fear not. Our site has a number of great resources for personal loans similar to to our “Coffee Break Loans: Legit or Scam? (August 2023 Review)” guide.

You can learn more about personal loans and options similar to Coffee Break Loans through other in-depth articles on our site. Check out our Guides section for more guides about personal loans.

Finally, have a look around at our reviews for credit cards, loans, and credit repair, which are great resources for those who are looking to establish or rebuild credit.

Learning about your options is a great next step in building your financial future.