Is it a good idea to sell off assets for debt relief? With the modernization of society comes the steep surge in expenses. This is mainly because there appears to be an endless list of things to spend money on despite ever-increasing prices. Spending goes on and on and before you realize it, you are trapped in a deep financial hole.
Nobody wants to be in this sort of situation. But to avoid it, you do need to be sensitive to some common symptoms of financial crisis in order to be able to control the circumstances while it is early enough. Remember that prevention is always better than the cure. Do not wait until your options are too limited to solve your problem. Act early!
If you are beginning to have difficulty paying your fixed and expected monthly bills with your existing net income, the crisis must have been at its initial stage already. Look closely at your spending. Where does your money usually go? There could be an excess of flexible expenses such as clothes, nights out, home decorations, gadgets, etc.. Consider the realistic figures carefully. If at least 25% of your monthly income is enough for settling your credit card’s minimum monthly payment due, you must have been spending impulsively the past days and weeks.
You might also want to look at how much you are actually able to save with your existing income. If you are unable to save at all, there could be something wrong. You should also have some allotments for unforeseen expenses such as emergencies, illnesses, unexpected repairs, etc.. If these are likewise unavailable, again you really have to reconsider your spending style.
There are actually several factors to watch out for. However, supposing you insensitively took all these for granted in the past and are now being chased by a lot of creditors, what are you going to do? Of course you can discuss your situation with your creditors and get a more manageable payment scheme. But all the same, you have payments to make. The responsibility remains with you no matter what happens and no matter how understandable your reason for being in such a situation may be.
The most common solution then is the sale of assets, which is in fact, a good option especially if you have valuable properties. What is important in this case is to be able to identify the item’s reasonable value as well as find the right buyer in the earliest time possible. Timing is very important because, naturally, you wouldn't want to under-price your properties too much just because you are desperate.
Pieces of jewelry are usually the easiest to sell. Their value normally does not depreciate over time as long as the esthetic component is well maintained. Usually the best thing to do is to have them appraised first by an expert. Based on the appraisal, you can identify the price that you can compare against current market levels. There are even circumstances where the value goes even higher so watch out for such opportunities.
Real estate properties are considered good investments because of their usual increasing value. This also makes them a good sell-off asset. However, it may not be a good option if you are in dire need of money to repay debts since you may not be guaranteed of a quick sale. This is especially the case if you intend not to make it available on installment since there are several other options out there that do offer such a plan. Nevertheless, if you are in need of a considerable amount to settle your debt then this option is worth holding on to.
Shares of stocks may likewise be sold but you must consider the economic condition when doing so because their value and salability may depend on it. This is a very volatile type of investment so you have to take into consideration several aspects.
Furthermore, cars, gadgets, tools, and things of this sort are normally sold at a depreciated value. A higher return can sometimes be expected if the item is still in good condition but it remains downgraded just the same. What is good is that you do not need to worry about too many documents such as property titles and the like when selling these types of item. However, you may need to document the state of the item upon sale to protect you from later complaints or future returns.
These are certainly good options to lessen debt. They can effectively ease pressure on your financial concerns but if you return to the same lifestyle that brought you such problems in the first place, then these solutions will just be temporary. It is still best to have control at the very start.
Now click for the next step in your free debt relief guide which deals with Bankruptcy.