Debt is a major concern for many families across the country. Despite what seems to be a robust economy, more and more people are falling behind on credit card, medical and other important payments as they look for ways to keep themselves financially afloat. If you feel that your debt situation has gotten beyond your control and worry whether you will ever regain control of it, you are not alone. Many people in your shoes feel similarly or believe they will never get out of debt.
As stressful as having debt may seem, it is not the end of the world. You can overcome this challenge and get control over your finances for a better outlook. Here are a few debt management tactics to consider.
Set an actionable budget
Budgeting can help to eliminate excess and wasteful spending and keep you from living beyond your means. Make a list of all income, debts and financial responsibilities. Determine how much money you have leftover that you can put towards your debt. Even if you cannot come up with enough money to meet the minimum payments or some of your bills, every little bit counts.
Talk to your creditors
As unpleasant as it may seem for you to reach out to your creditors to handle your affairs, do it. Many creditors offer relief programs and options to catch up on delinquent payments to those who experience medical and financial hardships. Explain your situation, and let them know that you are willing to pay but need lower payments. Try to bargain with them. Find out if you qualify for interest and late fee reduction/forgiveness.
Make timely payments
Even if you cannot pay the full amount due, continue to make payments by the due date. Try to pay the minimum to avoid additional late fees and other charges.
Consider petitioning for bankruptcy
If your financial situation is so far gone that you do not expect to have your debt under control with the above tactics and in a certain length of time, you should think about filing for bankruptcy. Learn the differences between Chapter 7 and 13 bankruptcy so that you can decide which option is ideal for your circumstances. With Chapter 7, you may have to give up certain assets to eliminate your debt. Chapter 13 may allow you to keep your assets as long as you stay current on the bankruptcy-structured payment plan. Both options can help to significantly improve your financial.
Getting out of debt is not always easy. However, with the right lifestyle and financial behavior adjustments and resources, it is doable.