Are you struggling with a mountain of debt? Not to worry. You may create a strategy for paying off your debt utilizing some of these 5 essential debt management ideas as long as you have a steady source of income. If you have questions, or would like to talk to a bankruptcy attorney about your options, contact The Law Offices of Paul Y. Lee at 951-755-1000.
- Set a budget It goes without saying that if you keep spending more money than you make, there is no chance you will ever be able to get out of debt. It will be beneficial to create and follow a comprehensive budget. Your budget ought to cover all of your living expenditures, allow you to pay off your debts, and preferably have some money left away for emergencies.
- Put your debts in order If you have several separate debt accounts, you should carefully review each one to determine which ones should be paid off first. For instance, paying off the credit card with the higher APR first will save you money on interest if you have two credit cards with identical amounts. You would likely prefer to pick the secured debt if you had to decide between paying an unsecured obligation, such as a credit card balance, and a secured debt, such as a vehicle loan, to prevent having your property taken.
- Get rid of high-interest accounts While it is true that most individuals shouldn’t take on any additional debt if they already have a significant amount of debt, this is not a set rule. Opening new accounts can be advantageous occasionally. For instance, you could have taken advantage of a promotion offering 0% interest on a new credit card for the first year. By moving a debt from a high-interest account to this new zero-interest account, you may save a significant amount of money. Just be certain you have the ability to pay off that new account before the special period ends. Additionally, you want to think about debt consolidation as a way to get rid of high-interest accounts.
- Make timely payments Few things are more annoying than making significant progress in paying off your bills only to make one small error and get hit with late fees. If your bank account was overdrawn when the payment was due, you would be charged twice as much. These sorts of fines may mount up quickly and make it difficult for you to make timely debt payments.
- Admit it when you’re stressed out One of the most crucial pieces of debt management advice is to recognize when you’re overwhelmed and to acknowledge it. You can reach a point in your debt where your amounts are increasing faster than you can settle them or when the damage to your credit is so great that it is no longer worthwhile to try to repair it. When you get to this position, you should and can consider filing for bankruptcy.
You might be able to select between a Chapter 7 and a Chapter 13 bankruptcy to help clear your slate and give you a fresh financial start, depending on the kind of obligations you have, your income, and your assets. To find out more about your choices, speak with an experienced bankruptcy lawyer by calling The Law Offices of Paul Y. Lee at 951-755-1000.