Yes, you can be arrested for debt. Here’s how that works


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You can’t be arrested for debt just because you’re behind on payments. No creditor of consumer debt — including credit cards, medical debt, a payday loan, mortgage or student loans — can force you to be arrested, jailed or put in any kind of court-ordered community service.

These creditors can sue you for an unpaid debt in civil court, however, which could indirectly see you arrested for debt. That’s why it’s critical to respond to a court summons and cover court-ordered fines or payments, including child support.

Here’s what you should know:


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3 cases where you can be arrested for debt

1. When you’re in contempt of a court order

For creditors to collect an unpaid debt that is not guaranteed by collateral, they must sue you and win a court-awarded monetary judgment. If you receive a notice to appear in court because a lender has sued you and you ignore that civil court order, you can be found in contempt of court. At that point, the civil case can enter criminal proceedings and a warrant can be issued for your arrest.

If you receive any kind of court notice, do not ignore it — even if you don’t recognize the company suing you. Aside from the possible legal troubles ahead, not showing up or failing to follow the instructions on the notice means you’ve missed the opportunity to settle the debt or negotiate a payment plan.

How to tell your debt lawsuit is legitimate

If you’re sued, keep in mind that there is a statute of limitations on debt. It’s illegal for a debt collector to sue you or threaten to sue you over a debt that is past the statute of limitations. This debt is considered “time-barred.”

These statutes vary by state and debt type, but typically last between three to six years. Note that there are some exceptions: For instance, the statute of limitations of credit card debt in Maine is six years and only three in New Hampshire, but in fellow New England state Rhode Island, it’s 10 years.

However, even if the debt is time-barred, the lender can still continue to contact you asking for payment. In some states, making a partial payment on time-barred debt actually “revives” the debt, meaning the statute of limitations on that debt is reset — allowing the debt collector to sue you once more to collect the full amount.

If you think a debt collector has violated the law, you can file a complaint with the Federal Trade Commission and your state’s attorney general, and also bring your own private action against the debt collector.

2. When you fail to pay child support

Failing to pay child support has the possibility of landing you in jail because it is a court-ordered payment. When the court orders you to do something — like appear during a child support hearing or pay support — and you fail to comply, you could be considered in contempt of court.

Again, it’s important to remember that you’re being arrested for violating the court order, not for any inability to pay bills. All 50 states have processes for criminal prosecution for failure to pay child support, but invocation of this process is rare.

3. When you purposely deceive the IRS to get out of paying taxes

Failure to pay your taxes could result in you being sued by the IRS (though the IRS does have extensive enforcement powers, and may be able to make collections without legal judgment).

If you continue to rack up debt with the IRS, you’ll face some kind of collection of fines or fees. And if you make a mistake and you’re audited, the IRS would be able to sue you to collect the money owed. You may even come face-to-face with a tax lien where your house or car can be seized to pay your debts. However, no matter how unpleasant, all of these instances would be civil proceedings and won’t get you jail time.

The two tax-related scenarios that will get you a prison sentence are tax evasion and tax fraud:

Examples of tax evasion and tax fraud
What it is Examples
Tax evasion When you knowingly refuse to file or pay your taxes, despite having the means to do so.
  • Underreporting income
  • Falsifying income records
  • Purposely underpaying taxes
  • Claiming illegitimate or fake business expenses
  • Claiming illegitimate dependents on your tax return
Tax fraud Tax fraud is when you intentionally lie on your tax returns as a way to limit your tax liability.
  • Claiming false deductions
  • Claiming personal expenses as business expenses
  • Using a false social security number
  • Not reporting income
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Tax fraud is different from tax negligence or avoidance. Tax avoidance is a legal way to minimize the amount of income tax owed. Examples of tax avoidance include deferring income by contributing to an IRA or 401(k), or claiming deductions you legally qualify for. Negligence is when you fail to make a reasonable attempt to comply with the tax laws — such as claiming a deduction you haven’t taken the time to determine if you truly qualify for.

Making an honest mistake or not having enough money to pay won’t turn your tax-related civil case into a criminal proceeding, but getting caught evading taxes or committing fraud will land you in hot water.

What to do if threatened that you’ll be arrested for debt

Review your rights under the FDCPA

If a lender or debt collector is acting particularly aggressive and threatening to have you arrested, their actions may be considered unlawful. The Fair Debt Collection Practices Act makes it illegal for a debt collector to threaten you with jail time.

If you believe debt collectors are violating this act, you should take the following steps:

Check local and state debt collection laws

On top of federal law, several states and cities have their own debt collection regulations. Be sure to carefully read the contract that you have with your lender, which will include information about how they can contact you. If they violate this contract or any law, you can file a lawsuit against them.

Send a cease communication letter

You can request debt collectors cease communications or only contact you in writing. After receiving the request, the debt collector is required by the FDCPA to obey it, and may only communicate with you to inform you that the debt has been terminated or that they are taking specific action, such as a lawsuit.

What can happen if you don’t pay what you owe

Your credit will take a big hit

Even if it doesn’t land you in jail, not paying your debts will certainly have other negative consequences on your life. Most notably, your credit score can be impacted and any debts you owe generally stay on your credit report for seven years. This can affect whether you’re able to get a new credit card, mortgage loan or auto lease.

Your assets could be seized

If you secured your loan with some form of collateral, such as your house or car, the creditor can repossess those assets as a way to pay back what you owe.

Your wages can be garnished

Wage garnishment is when a creditor obtains a court or government agency order that requires your employer to withhold a portion of your wages and send it to your creditor. The amount that can be garnished depends on the type of debt and your state’s garnishment laws.

For example, if you’re way behind on your federal student loan debts and the lender can’t get in touch with you to figure out a payment plan, they may take you to court to request a wage garnishment. However, this typically only happens if all other methods have been unsuccessful and your student loan is turned to the Department of Justice for collection.

Note that student loans are also considered “civil debts,” and you cannot be arrested for not paying them.

5 ways to improve your debt situation

1. Take stock of your debt

Start by reviewing all of the debt you owe. You may find that the debt is time-barred. In some instances, the debt might not even be yours — debt collectors have been known to make mistakes, or participate in debt consolidation scams.

2. Contact your creditors

It can be overwhelming to speak with lenders who are already threatening you, but if you can stomach it, doing so can save you money. Ultimately, creditors just want to get repaid. If you come to them with a cool head and explain your current financial situation, oftentimes creditors are willing to hear you out and negotiate a deal.

If you do choose to have that conversation, make sure you come to them with a suggestion on how to resolve your debt. Explain how much you can pay toward your debt on a monthly basis, and if you need any additional assistance, such as lower fees or interest rates. If your debtors agree to a new repayment plan, be sure to document it and send along to your creditors for transparency.

3. Seek the help of a credit counselor

If you find that your financial situation is spiraling out of control, a trained professional can give you guidance on your current debt crisis.

credit counseling service can create a more holistic financial plan so that you don’t find yourself in the same situation in the future — like helping you create a working budget, devising a plan so you can get up to date with current bills and providing tools so that you can stay on top of the plan.

4. Enter into a debt management program

If you owe money to multiple creditors, entering a debt management program can help you better manage your debts. This is a service provided by nonprofit credit counseling agencies that’s designed to help consumers get out of debt over three to five years.

A credit counselor will negotiate interest rates and fees for your debt on your behalf and consolidate all of it into a single monthly payment. You’ll then make that payment directly to the credit counselor, who will divide the money into appropriate payments for your various lenders.

When you enroll, you can expect to pay an enrollment fee of around $25, plus a monthly maintenance fee between $25 and $50. Once enrolled, your credit counselor will contact your lenders and notify them that they’ll be making payments on your behalf. That means you’ll no longer receive collection calls.

You can enroll credit card debts, student loan debts, medical bills and personal loans into a debt management program. Secured debt cannot be enrolled. Note that you won’t be able to take on new forms of credit while you’re enrolled in the program. You may even be asked to close most lines of credit (one may be allowed only for emergency purposes).

You can use the following resources to find a debt management program that makes sense for you:

5. Consider debt consolidation

A debt consolidation loan is a personal loan that you use to pay off other debts. It works by combining all of your debts into a single, larger debt that you then pay off monthly. This means your debt is transferred to a different lender who you’ll then make direct payments to. Similarly, you can also consolidate credit debt from multiple issuers with a single balance transfer card.

You can apply for various debt consolidation methods through your bank, credit union, credit card company or other lender. The benefit of debt consolidation is that you can make your debt more manageable by combining it. This often helps you qualify for a better rate than what you would have been paying to each lender separately. Furthermore, debt consolidation can cut down on the collect calls you receive.

Here are a few common ways to consolidate your debt:

6 types of debt consolidation methods
What it is Pros Cons
Balance transfer card A credit card that you transfer existing credit card debt onto.
  • Can save money by moving high interest debt to a card with a lower rate
  • Some cards offer low intro APRs
  • May need to pay a balance transfer fee of 3% to 5%
  • Violation of the cardholder agreement could result in additional fees
  • Not paying in full before end of intro APR rate could result in interest on the remaining balance
Personal loan (unsecured) A fixed-rate loan that combines all of your debts into one larger debt you pay off in installments.
  • Choose a longer or shorter repayment schedule
  • Could secure a lower, fixed rate
  • Longer repayment schedule could result in higher interest payments
  • Potential origination fee
  • Require good credit for affordable rates
Personal loan (secured) A fixed-rate loan that combines all of your debts into one larger loan that is backed by a personal asset, such as your car or home.
  • Fixed rate and term
  • May offer a lower rate than on an unsecured personal loan
  • If you default on the loan, the lender could seize your personal assets
  • Potential origination fee
  • Loan terms may be dependent on collateral
Home equity loan A loan that is collateralized by the equity you own in your home.
  • Competitive fixed rates
  • Can borrow large amounts for long periods
  • Lenders will place a second lien on your home if you fail to pay
  • Closing can take weeks and come with many fees
Federal student loan consolidation An unsecured loan that consolidates multiple federal student loans into a single federal loan through the Department of Education.
  • Predictable payment schedule
  • Lower your monthly payments by extending the loan term
  • Interest rate on debt remains the same
  • You’ll pay more in interest over the long term because the repayment period is longer
Private student loan refinance Combine multiple student loans, be it private or federal, into one larger private loan.
  • Could qualify for a lower interest rate
  • Predictable payment schedule
  • Lose consumer protections specific to federal loans
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There are downsides to debt consolidation. Debt consolidation loans, in particular, can have longer repayment schedules. This may mean you’ll pay more in interest charges over the long run than if you paid off each lender individually, depending on the rate you qualify for. These loans can also come with an origination fee equal to 1% to 8% of your loan amount. However, these downsides may be worthwhile if you can get debt out of collections and have an affordable repayment plan.

Matthew Speiser contributed to this report.

This article originally appeared on and was syndicated by


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50 easy ways to get rid of your debt

Want to pay off debt this year? You aren’t alone. In a Policygenius survey, Americans said their biggest 2020 financial goal is getting rid of debt.

Repaying debt isn’t as simple as waving a wand — it’s often a long-term strategy. But there are easy steps to help you pay it off in a short time frame. Whether it be credit card debt, student loans or a mortgage, here are 50 ways to pay off your debt this year.

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Be realistic about your debt repayments. Your credit score will still go up even if you make small incremental payments — and you won’t drain yourself of valuable savings.

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A budget ensures you have enough money for essentials and helps you set aside extra for debt repayment. Try using this free downloadable budgeting spreadsheet to get started.

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Whether it’s to save spare change or manage your budget, using an app can help you keep money top-of-mind while you’re working on tackling debt.

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Improving your credit score now can help you qualify for lower interest rates in the future. Here are five ways to bolster your credit in 30 days or less.

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This debt repayment strategy has you pay off your debts from highest interest rate to lowest. While it may take longer to see results, you’ll pay less overall and get out of debt faster.

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Using this method, you pay off your debts in order from smallest balance to largest. Once you tackle a couple small debts in the beginning, you may have the motivation to chip away at larger bills. Just make sure you’re making the minimum payment on all your accounts.

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If your debt is growing at a higher rate than your potential savings, then it might make more financial sense to pay off your debt first before you start saving. This could mean lowering the amount you contribute to a savings or retirement account.

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The same goes for investing. Before you start investing for the future, cover the debts you have now.

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Got credit card debt? One option is to transfer your credit card balance to a different card, usually with a lower interest rate. This will limit the amount of money you’re paying to interest. Note: You may have to pay a balance transfer fee, so make sure to read the fine print.

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Try to negotiate a lower interest rate on you credit card with the card company. You’ll likely be successful if you’ve been a longtime customer and have a previous track record of making your payments on time. It won’t affect your credit score to ask, so it’s worth a try.

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The information on your three credit reports determine your credit score, which in turn help lenders decide what interest rates to offer you. So before you create a payment plan or try to negotiate a lower interest rate, make sure the amount lenders think you owe is actually correct.

You can dispute anything that’s incorrect to get it updated or removed. Start here with this guide to reading your credit report.

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Credit counseling services are offered at low or no cost at credit unions, nonprofits and religious organizations. You’ll get free resources to help you create a debt management plan. Or, you can take matters into your own hands by …

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Sometimes, when you’re saddled with a lot of debt, it’s possible to negotiate with the organization to pay it down. For example, if you’ve just received a large medical bill, call the health care providers. Some will offer you a reduced rate. You can also negotiate an insurmountable tax bill with the IRS.

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Debt settlement is the process of negotiating with a lender to settle your debt for less than what you owe. This sounds great, but it immediately lowers your credit score and a note remains on your credit report for seven years. Many debt settlement companies are also scams. Ones that are legit, like National Debt Relief and Freedom Debt Relief, are for-profit companies may charge higher fees for their services, which can take years to complete. Instead, consider debt consolidation.

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If you have multiple debts, you can bundle them into one monthly payment with a debt consolidation loan. This method isn’t for everyone — you’ll be taking out a new loan to repay your old ones — but it can lower your interest rates and help you pay down your debt faster.

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The Consumer Financial Protection Bureau website has an entire section dedicated to debt advice — namely what to do if a debt collector is falsely claiming you owe a debt that you’ve either already repaid or have no obligation to repay. Staying in the know will keep you from paying money on a debt you don’t owe.

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“Before I make any major purchase, I ask myself three questions: Do I need it? Do I want it? Or both? It’s got to be both for me to buy it,” said Warren Robbins, licensed adviser with Policygenius. By adopting his three questions, you can keep your spending in check.

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Policygenius adviser Brittany Robb saves a substantial chunk of her paycheck through automation. “A large portion of my paycheck goes to a high-interest account I am only able to withdraw from twice a year,” she said. “Seeing the money add up is really motivating.” Tackle your debt in a similar way by paying it off through a separate account that you fund directly through payroll.

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Personal finance writer and author Donna Freedman’s favorite financial advice? “Future You is going to be judging Current You. Harshly.” Keep future you in your head when making spending decisions.

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The last thing you want to do is rack up more debt with a credit card. But if you’re smart about how you use them, a credit card that offers rewards — whether it’s travel miles or cash back — can help you save money overall and repay debt faster.

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Literally. Or, at the very least, remove your credit cards from your wallet. Store them in a safe deposit box while you pay down your balances.

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You can also delete auto-saved credit card numbers from online shopping accounts to reduce the likelihood of impulse buys.

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Having money in tangible form helps you realize how quickly your money runs out. Here’s a guide to going cash-only.

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Try to go an entire month without spending on anything but the necessities. You can start paying off debt this way — and you may not miss some of your regular purchases as much as you thought.

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It may seem counterintuitive, but as you pay down your debt, make sure you’re also saving for a rainy day. Your credit card is not an emergency fund, and it’s important to have 3-6 months of expenses saved so a bump in the road doesn’t derail your plans to get out of debt.

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Joshua Holt graduated law school with $200,000 of debt. To help motivate himself to pay it off, he cut 200 strips of paper, one for every $1,000 in debt and looped them together in a chain that hung in his apartment. As he paid off the debt, he steadily cut loops away. As his debt shrunk, the chain shrunk. The visual motivated him to keep going until the debt was gone.

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It’s easier than ever to rack up monthly subscription charges, from streaming services to art supplies. Make a list of your subscriptions (or use an app to keep track of them) and consider purging the ones you don’t use.

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Put a chunk of your annual or quarterly bonus toward a high-interest loan.

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If you haven’t negotiated your salary or asked for a raise recently, you may be leaving money to pay off your debt on the table. Write down all your accomplishments. You should also record contributions to company culture, and indicate areas where you’ve improved throughout the year. Bring all of this to your next employee review along with a salary range you’d be happy with.


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Not all employers are so generous. If you aren’t eligible for a raise, or if your supervisors come back with a number below your expectations, consider getting a new job with a salary you’re more comfortable with.


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If you get a tax refund this year, use a portion of it towards paying off your debt.


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There are plenty of low-commitment ways to earn cash on the side, like renting out your parking space. Just make sure you’re using this extra money to pay off your debts.


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One recurring expense you can easily trim is your home and auto insurance. Because insurance companies regularly reassess their rates, it makes sense to regularly check to see whether you can save.


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Whether you pay rent or a mortgage, downsizing can reduce your monthly housing costs. That may mean moving to a smaller home, or to a less favorable location, but those compromises may be worth it if it means a debt-free future.

Here’s how to know when to downsize.


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If you currently lease a car and the monthly payments are piling up, it might be time to trade in your ride for a cheaper one. Speak to your lessor or lienholder about the possibility of trading in your pricey ride for a less expensive or older model.


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Are you spending too much money each month on gas, car insurance and general upkeep? Consider using public transportation. Even if you don’t totally ditch your car, the savings in gas alone are probably worth it.


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If you rent or mortgage payments are too much to manage each month, consider renting out a room if you have the space. A roommate can help pay the bills each month and cut your cost of living. Even renting out a room through a short-term rental site can turn into a significant source of extra income.


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Instead of spending money on dinner and drinks, try swapping out your traditional date nights with a free activity. The money you save from skipping out on an overpriced restaurant can be spent minimizing your debt.


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Avoid adding to your debt with new purchases by buying secondhand items. Not only is it cheaper, but it’s also great for the environment.


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If having a credit card feels like a spending free-for-all, try using a debit card. You’ll only be spending money you actually have, without accumulating additional debt.


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Hiring someone to mow your lawn, wash and fold your laundry or clean your apartment may save you time, but chances are it’s making it harder for you to allocate more of your monthly spend toward debt repayment.


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Declutter your home and make some extra money at the same time by selling possessions ) you don’t use anymore.


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While interest rates on high-yield savings accounts aren’t as high as they were a year ago, they will still help you grow your savings faster than a traditional savings account. And unlike a certificate of deposit, high-yield savings accounts won’t lock up your money.


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The information on your W-4 tells your employer how much income tax to withhold from each of your paychecks. Adjust your W-4 to ensure you’re getting the maximum amount of money each paycheck. Updating your W-4 is free, you can usually do it entirely online, and the IRS has an online withholding app to help you fill it out properly.


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Banking fees can drain your savings account, leaving you with less money to put toward debt. Look for a bank that doesn’t charge an annual fee just for having an account. Watch out for ATM fees, overdraft fees and over-the-limit fees for charging too much to your credit card.


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Sometimes you need to swallow your pride and asking your social network for help. Offer to put a repayment plan in writing and stick to it. You can try raising money through websites like GoFundMe or charities like RIP Medical Debt.


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If you’re feeling overwhelmed by debt, it may be time to turn to a professional financial advisor. A trusted professional can help you make a plan to move forward and work towards paying off debt.


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The Financial Independence, Retire Early community embraces a financially minimalist lifestyle to maximize savings. Fans of the method cut cable, restaurant expenses and clothing purchases — anything non-essential to meet their savings (and debt repayment) goal.


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Get ahead of debt before it builds up by negotiating tuition rates. Often, financial aid packages for colleges and private schools are negotiable and can save you money. You may also qualify for discounts you didn’t know about, so do your research beforehand.


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While taking out an additional loan is not the best way to repay debts, it can be used as a last resort if your debt becomes unmanageable. Check with local banks and credit unions to secure a personal loan. Or consider reaching out to friends and family — but make sure you have a plan to pay them back before you accept a loan.


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This article originally appeared on Policygenius and was syndicated by


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