3 Important Steps To Take When Dealing With Debt

Posted on: 21 November 2014


Finding yourself in a financial hole is not something you want to experience. It happens, though, and in order to deal with this situation, these steps can be done.

Manage Your Finances

The very first thing you should do when facing debt is to manage your finances. Take a look at your assets, and see what you can sell for some quick cash. This may mean trading in your vehicle for a less expensive model or selling clothes you don't really need.

Once you have collected some money, try to eliminate any expenses that are not a necessity. These things may include going to the store for appliances or going to the movies with some friends. The fewer expenses you have, the more money you will have to pay off your debt.

Create a Debt Payoff Plan

After you have saved up some extra cash, it's time to start paying off your debt. Now, this may not be a quick process, but it's important to stay the course. It's smart to pay more than the minimum amount on your credit cards. Doing this helps reduce your interest rate. And if you are lucky, you can pay off your debts in a quick amount of time.

During your debt payoff period, you should absolutely not use your credit card. This will only add to your debt, making your problems worse in the future. It's also smart to physically write down how much you owe and which creditors need to be paid. This gives you something concrete to look at, so you can go about your payoff plan the right way.

File For Bankruptcy

If you can't come up with enough money to pay off your debts, you will need to file for bankruptcy. Although this may sound like the end of the world, it isn't. Once you have filed for bankruptcy, creditors will no longer be able to call you or send you letters. The harassment will end, so you can think with a clear mind.

In order to make the bankruptcy process go smoothly, you can get help from a bankruptcy attorney. These professionals will file all of the necessary paperwork, and they will help you decide on whether to file for Chapter 7 or 13 bankruptcy. Your attorney will also help you come up with a payment plan, so you will know exactly what steps need to be taken. For more information, contact Wagner Law Office PC or a similar firm.