Managing debt is no fun, but is a necessary part of life if you want to have financial success. The key to successful debt management is to come up with a plan that works for you, and stick to that plan. Once you have identified your financial needs, you are better prepared to come up with a debt management plan that makes sense. Regardless of whether you have a little debt, or are struggling to make ends meet, there is a plan that will help you.
The first step is to make a list of your expenses, and add up your total household income. Once you do that, here are five ways to manage the debt you have:
• Budget to spend only what you make, and no more. If you are spending more than you make, a budget will show you where you can cut out an expense, or at least cut back on the amount of that expense each month.
• Consolidate high rate debts into one loan with a lower interest rate, so you only have one payment each month at a lower rate. This will not only make it easier to pay the debt because you will only have to make one payment, but you will also pay off your debt faster because the interest rate will not be as high.
• Ask your mortgage lender to modify your mortgage. A mortgage modification lowers the interest rate on your house payment, which means a lower house payment. If you are able to pay less for your house each month, you can use the extra money to pay off other debts.
• Focus on one debt at a time, pay that debt off, and then use that monthly payment to work on the next debt.
• Call your credit card companies and ask for a lower rate, or for a lump sum payment of less than what is owed to settle the account in full.
You can also manage debt by seeking the relief offered by the bankruptcy laws. The biggest benefit of filing bankruptcy is that the instant you file a case your lenders are prohibited from contacting you, from maintaining pending collection actions, or from starting a new collection lawsuit against you. This means if you are in foreclosure or your wages are being garnished, these will stop the minute a bankruptcy case is filed.
For more information about bankruptcy, contact us at www.DsouzaLegalGroup.com.