5 Tips to Lower Your Debt

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5 Tips to Lower Your Debt

5 tips to lower your debt

Sometimes, we talk to potential clients who are surprised when we tell them that bankruptcy might not be their best option. During every free consultation, we map out the financial picture for a potential client, then walk them through every available option.

Many times, people are overwhelmed by their mountain of debt. Someone told us recently that they felt like they were trying to dig a hole using a single chopstick. Even though it feels like a lost cause, many times you can avoid bankruptcy by using one or two of these tips:

1. Talk to your creditors

It never hurts to ask for a little help. Hopefully, you know everyone that you owe, but if you’re not sure, pull your credit report. Make a list of everyone you owe, and how much you owe each institution. Figure out how much you’re able to pay each one. Call each company you owe and tell them that you want to pay off your debt, but you’re only able to afford a certain amount. Sure, debt settlement will go on your record – but it’s better than not paying anything and letting your debt continue to spiral out of control.

2. If it’s not too overwhelming, try to consolidate

Make a list of everything you owe, along with interest rates on each debt. Figure out what your average interest rate is, and then try to find a loan that has a lower interest rate. You want a loan that will let you continue to pay down your debt, but at a lower monthly payment. Be careful though – you don’t want to commit to a longer term to lower your payments, since that will cancel out any savings from a lower interest rate… You might end up paying more in the long run.

3. Transfer balances between cards

If you’re not too far in the hole and your credit score is still decent, you might be able to transfer balances from high interest rate cards to lower rate cards. Sometimes it’s even possible to get a new card with a very low introductory interest rate, which would allow you to pay off your debt faster during the intro period. Be careful though – don’t fall into the trap of transferring balances, then running them up again on the cards you just opened up.

4. Work with a financial planner

Sometimes, you just need an expert to point you in the right direction. A financial planner might be able to help you formulate a plan to pay off your debt without running up more debt in the meantime. They’ll be able to help you understand exactly how to manage your money and avoid the pitfalls that lead to increasing debt.

5. Find a bankruptcy attorney

If your debt is too overwhelming and there’s simply no way to pay it off, it’s probably time to find a good bankruptcy attorney. A good bankruptcy attorney will explain all of your options so you know what’s best for your situation. Chapter 7 bankruptcy will allow you to completely erase certain types of debts, while Chapter 13 creates a plan to pay your debts off over a period of time.

If you have any questions about bankruptcy or would like to schedule a free debt consultation, please call us at 214-760-7777 any time.

By | January 31st, 2016|Bankruptcy, Debt|0 Comments

About the Author:

Mark is dedicated to helping families in North Texas through difficult financial problems. He insists on a personal touch that most bankruptcy attorneys in Dallas are too busy to provide. Call today for a free consultation and speak directly with Mark.

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