Thursday, January 28, 2016

Family Finance: What To Do If You Are Drowning In Debt

Millions of families in the world have problems with overwhelming debt. Once a person is underneath the rock of overwhelming debt, it becomes burdensome to get from under it. 

Fortunately, some solid solutions still exist for climbing out of debt. The following are six things the household head can do to regain financial composure:

Cut the Cards


The first step toward regaining financial footing is to stop spending. That may mean cutting the credit cards in half, but financial freedom will be worth the small sacrifice. Get rid of cards you don’t really need, but only use to make extra purchases.

Obtain a Credit Report


The next step that a consumer should take is obtaining a copy of the credit report to see how bad the situation really is. A consumer can take steps like disputing foreign accounts and charges if that person wants to climb out of overwhelming debt. 



Take a Counseling Course


Free credit counseling courses can help a homeowner to develop healthy spending and payment habits. Some people have to take counseling before they can file for bankruptcy.

Consolidate


A debt consolidation is something that a consumer can do, but the person has to have a credit score that is still acceptable. Some financial companies will provide a high-risk consolidation loan. However, the provider may offer the loan at a high interest rate.

Sign up for Debt Management


A debt management program is another option that one may have for recovering from overwhelming debt. A debt management program involves a third-party specialist who negotiates with the lenders and then then makes payments toward the creditors on behalf of the client. 

Debt management companies usually charge a monthly fee for their services. Debt management is a good choice for a person who has more than two open debt accounts and had various interest rates on each account. The arrangement can even out the interest and keep the person’s financial plate clean. 

Speak to a Bankruptcy Attorney


Bankruptcy may be a good solution for someone who has a low annual income and truly cannot pay the bills. A Chapter 7 bankruptcy is for a consumer who does not have money left over after calculating the disposable income. 

A Chapter 13 bankruptcy is one that requires the consumer to come up with a repayment plan and offer to pay a percentage of the debt over time. It’s important to speak with a bankruptcy attorney like those at Morrison & Murff when dealing with major financial problems. 

Dealing with debt can become a major burden for many families. Without self-discipline and help from experts, it may feel impossible to overcome financial problems. These tips can help you get back on the right track and control your finances.

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