You can get out of debt
Image Source: Flickr User Ted Partrick
If your debt is out of control, life can feel like an endless cycle of payday, paying bills, running short on cash, and waiting worried until your next payday. This is no way to live and can drain all quality of life. No matter how much debt you have, though, there is a path to conquer your debts. Consider these seven steps for getting debt under control – tips for Greensboro, North Carolina consumers and those in debt all across NC.
#1 Admit you’re in debt
Denial is a big issue when it comes to financial problems. Just as with a drug or alcohol problem, admitting the problem is the first step. Acknowledge that you are in debt and need help to get started on the path of dealing with the problem. You don’t have to sing it from the rooftop, but you do need to admit it to yourself, and if you’re in a relationship where you share debt and living space with a partner, you need to come clean with them about your debts.
#2 Find out how much you owe
Most people don’t know the extent of their debt. You can’t get your debt under control unless you know the reality of your financial circumstances. Pull out your bills, collection notices, credit card and bank statements and do the math. Get your total debt number. Also, calculate up how much you need to pay each month on your debts to stay current. Compare that to your income and living expenses. This leads you to step three.
#3 Decide if you can afford your debt or not
For some consumers, the fact is, they cannot afford to pay their debt because they have accumulated more than can be serviced on their income. Perhaps you lost your job or had a dip in income or increase in expenses for a period, and you haven’t recovered. If you can tighten your belt a bit – without doing without necessities – and pay your bills, then that’s the path to take. But if you can’t pay your bills on your income, no matter what, bankruptcy is something to consider.
#4 Evaluate bankruptcy as a solution
If you cannot afford to pay your bills, simply ignoring them won’t work. Creditors will keep calling, debt collection threats will begin, and you may soon find yourself dodging collection calls at work, on your cell phone and at home. This can make your life too stressful to bear. Bankruptcy can stop the collection and stress cycle. Chapter 7 bankruptcy wipes out unsecured debt like credit cards, medical bills and lingering charged off debts. Chapter 13 can buy you time to catch up on past due balances.
#5 Learn to budget
If you choose bankruptcy as your solution to wipe out your debt, you must make the most of the fresh start that Chapter 7 and Chapter 13 offer. That means setting up a budget, making a plan to stay current on your bills and also to save towards your retirement as well as building up an emergency fund. Most consumers don’t use a budget or track their spending. This lack of understanding about spending habits can lead you right back into financial crisis. Get educated – the internet offers tons of free budget tools.
#6 Don’t debt spend
Debt spending is a bad habit. Anytime you swipe a credit card and don’t have the money to pay that card off in full at the end of the month, you are debt spending. If you buy a pair of jeans and can’t pay it off in full, it’s like taking out a high-interest loan to buy that item. If you think about every swipe of your credit card in those terms, you will swipe less often. Debit card spending – or spending cash – will help you keep track of your money and keep you out of future debt.
#7 Cut living expenses
Whether you chose to tackle debt with or without bankruptcy – you should closely assess your expenses and how you choose to spend money. If you eat out often, consume alcoholic beverages, smoke, or any other costly habit, you should cut back. Limit eating out to special occasions or a once a month treat. If you must drink, having a cocktail or beer at home is much cheaper than doing so in a bar or restaurant. Smoking is costly, and a health risk - and your money is better spent on a smoking cessation program.
You can get out of debt
There are two paths to get out of debt – digging your way out or turning to bankruptcy if your debts are too excessive for your income. By tightening your belt, prioritizing high-interest debt and chipping away at your debt month by month, you may be able to conquer your debt, in time. The other path is bankruptcy and offers immediate debt relief and a fresh start. Bankruptcy puts a stop to debt collection harassment and can give you the peace of mind that you deserve.
If you are in debt in Greensboro, North Carolina, contact the Law Offices of John T. Orcutt for help. Call +1-919-646-2654 for a free North Carolina bankruptcy consultation at one of our offices in Raleigh, Durham, Fayetteville, Wilson, Greensboro, Garner or Wilmington. Let us help you get debt free for good. Call now.