Managing Debt: Is Bankruptcy the Only Option?
Are facing a mountain of debt?
Realizing you are in over your head can be emotionally traumatic.
Debt is crushing; it keeps you awake at night, interferes with your relationships, and can even impair job performance. Plus, it’s just depressing to be behind the eight ball.
Bankruptcy is not the only option!
You attorney can help you evaluate debt relief options and guide you to an option that works for you.
If these things sound familiar, confront your debt head-on and solve the problem.
Signs You’re in Trouble
Struggling to manage debt is a common problem.
Do you worry about money every day?
Do you dread looking at your checking account and credit card statements?
If you worry about money and sense doom around the corner, you’re in trouble. Additional red flags are -
You’re late paying monthly bills.
Your credit cards are maxed out, and the balances are rising because you are making minimum payments only.
You have no savings.
Your credit score is declining.
You’ve been denied new credit because you have excessive debt.
You are incurring charges for checking account overdrafts and late payments.
Start Managing Your Debt Now
Challenging your debt head-on is hard work and requires dedication. But, with perseverance and a sound plan, you can start fresh with a clean slate.
Budget: Take some time to create a budget. Make sure your budget reflects your actual income and expenses. Knowing your financial situation can make you feel better, and it will help you understand what actions to take next.
Stop overspending: Overspending is easy because credit allows you to spend more than you can afford. Cut your expenses, and make sure you’re not adding debt to what you already have.
Read your bills and credit card statements: Are you incurring expenses that aren’t in your budget? Are you paying for services you don’t need or use? Cancel services you don’t need. Cancel, cancel, cancel.
Implement a debt payoff method: Two of the most common ways of paying off debt are the “debt avalanche” and “debt-snowball” methods.
When you avalanche your debt, you pay off the highest-interest balances first. When you snowball your debt, you pay off your lowest balances first and tackle the higher balances last. These methods work only if you pay more than the minimum monthly payment. They won’t work for everyone.
Whatever process you choose, adopting a debt payoff method allows you to focus on your goal and monitor your progress. As your debt is reduced, you’ll soon see light at the end of the tunnel and be encouraged to continue your work.
Contact your creditors: Call your loan and credit card issuers to discuss alternative payment options. Most will resist a request for assistance. Ultimately, however, they’ll understand that helping you is the only way to get paid. Tell them you’re considering debt-settlement or bankruptcy if you can’t make affordable payment arrangements.
Think about ways to add to your income: Consider taking on a side job. By adding income into your budget, you will pay off bills faster.
Consolidate debt with a personal loan: When you consolidate debt, you pay off high-interest credit card balances with a personal loan. Most personal loans have lower interest rates lower than credit cards. Therefore, debt consolidation can help you pay off debt faster and save money. Although debt consolidation as an option is advertised heavily on the radio, the fact is, if you need a loan, most lenders will reject you.
Debt settlement as an option: Many debt relief companies also advertise claiming you can settle your debt for a fraction of what you owe.
Debt settlement companies advise their clients that creditors will settle after the debtor stops paying. That may be true, but it is not always advisable. Some lenders will sue you to collect what you owe. Lawsuits can lead to judgments being entered against you, liens against your property, wage garnishments, and levies on your bank accounts. While many debt relief companies are legitimate, there are debt relief scams. So, be careful and research all options thoroughly before considering this option.
Get professional help: Sometimes, no amount of budgeting or cutting back will help. If you can’t solve your debt problem by yourself, an experienced attorney can help you. And an attorney can advise you whether to file bankruptcy. By filing Chapter 7 bankruptcy, you can eliminate most of your debt in just a few months.
We recommend that you consult an experienced debt-relief attorney before taking out a personal loan or hiring a debt settlement agency.
At the law firm of Ernest G. Ianetti, Esq., we explore various debt-relief options with our clients and recommend bankruptcy only as a last resort. If you’re struggling with debt, call us for a FREE consultation. We’ll review your situation and craft a personalized solution to help you get out of debt. Get a good night’s sleep and start fresh. To schedule a FREE Consultation, click here.
The Law Firm of Ernest G. Ianetti, Esq. has over 30 years of professional experience. Ernest G. Ianetti, Esq., represents clients in Chapter 7, Chapter 13, and Chapter 11 Bankruptcy. Our office is conveniently located in the Rockaway Townesquare Mall complex. We represent clients from Morris County and surrounding areas, including Sussex County, Essex County, Union County, and Passaic County.
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