Being in debt that is out of control can be intimidating and confusing, and you may not know the best way to get back on track. Whether you need the re-set that bankruptcy can provide or can just make some lifestyle changes in order to keep up with payments, I’m here to help and guide you.
Cutting Costs
One of your first tasks before we even meet will be to create a detailed budget in writing, being sure to track exactly where your money goes. Sometimes it’s easiest to write down how you spend your money for a month or two so that you account for small discretionary spending that can really add up. You may find areas where you’ve been unknowingly overspending, and cutting out that spending might free up enough money to keep up with your debt payments. You can also shop for better rates on things like cable and cell phone bills. If this will help you to avoid bankruptcy, giving up some splurges will be worth it.
As you’re tracking your spending, you’ll also want to look at your other expenses, such as housing. If you’re renting, is the rent you’re paying reasonable? If not, you might consider moving somewhere more affordable by lowering your standard of living or moving to a different area. If your lease is close to ending and you feel your rent is higher than the going rate, talk to your landlord to see if they might be willing to lower your rent. Once you redirect your rent money to paying off debt, you’ll soon be debt free and can then move again, if you want to. If you own your home and are having trouble keeping up with your mortgage, speak with a loan officer about refinancing for a better interest rate and lower payment or pulling out some equity money to pay off higher interest debt. Selling your home might also be a good idea, but before making any of these financial decisions, speak with a tax expert about the long-term consequences.
Negotiations
In addition to cutting overall spending, there are other things you can do to decrease your spending. If you owe money on credit cards, call the issuing banks to ask about lowering your interest rate or any other deals they might be able to offer you. You also might be able to transfer high interest rate balances such as department store cards to a bank card with a better interest rate, which decreases the total you’ll pay. If you have medical bills, it’s worth the effort to call the hospital or company to ask if they’d be willing to accept payments on your balance. They may even be able to write off some or all of your debt if you can demonstrate financial need.
Time to Take Action
If you’re struggling with debt and considering bankruptcy, give me a call. We’ll look at your situation and explore alternative ways to handle your debt while preserving your credit and property. If bankruptcy truly is the your best choice, we’ll get your case filed quickly so that you can make a new financial start.