There are tons of reasons why people find themselves buried in debt, and the situation appears to be more common than ever before. If you are committed to getting out of debt, start by developing a budget. From there, you can move to one of these debt elimination strategies and reclaim control over your finances.
- Develop a Payment Strategy
Now that you have a budget and are ready to move forward, it may be helpful to consider these two popular debt repayment strategies:
- Debt Snowball: This method is one of the most common methods to pay off significant debt balances. It asks you to select your smallest balance first and commit all of your extra savings to pay it off. Once you do, move on to the next smallest balance. Keep doing this until all of your bills are paid in full.
- Debt Avalanche: This is a similar technique, but it looks at interest rates instead of balance size. You start paying the balance with eh highest rate first, then continue moving to lower rates until your debt is gone.
- Use Debt Consolidaiton
Debt consolidation loans lump several higher rate balances together into one payment. If you can make the payment, this can be an excellent way to get spiraling interest rates and fees under control.
- File for Bankruptcy
Bankruptcy is not something to be taken lightly; however, if you are completely overwhelmed by debt and do not see a realistic way out, it might be time to consult with a qualified bankruptcy lawyer Rockville MD. They can help you decide if this is the best solution for your situation. Remember that bankruptcy will appear on your credit report for at least seven years, so you’ll be dealing with the effects of it for quite some time.
There are solutions to mounting debt. Look into popular repayment strategies and debt consolidation first. If you are genuinely overwhelmed, it might be wise to consider bankruptcy to get a fresh start.