Strategies for getting out of debt

On Behalf of | Jan 27, 2020 | Bankruptcy |

Americans who are struggling to pay down debt may feel as if they will never be financially secure enough to retire. For some Tennessee residents, their relationships with debt begin when they decide to finance their college education with student loans. Individuals may also grapple with credit card debt, auto loans and mortgages throughout the course of their adult lives. Credit card balances may be the most difficult to pay off because they have interest rates of 20% or more.

Therefore, it can be difficult for those with limited incomes to make more than the minimum payment each month. At some point, those who are struggling to save for retirement will need to make a plan to get out of debt. The first step is to create a list of all the debts that a person has and how much each creditor is owed.

The next step is to cut back on any unnecessary spending and put the money saved toward outstanding debt balances. Debt consolidation loans may help individuals lower the interest rate on their debt, which may make it easier to pay off in a timely manner. The snowball and debt stacking methods are other tactics that a person can use to pay down credit card, auto loan or medical debts in a reasonable amount of time.

Individuals who are struggling to repay their debts may benefit by filing for bankruptcy. By filing for bankruptcy, it may be possible to obtain an automatic stay of creditor contact or collection activities. In a Chapter 7 case, debtors might have debt balances discharged without paying creditors anything. Furthermore, it may only take a matter of weeks or months to obtain that discharge. An attorney might answer any questions a person may have about the bankruptcy process.


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