Now that the country’s debt ceiling crisis has been averted, for now, it’s time to take a look at individual American’s debt ceilings with tips provided by Forbes.com.
Consumer debt in Louisville can be difficult to tackle. Mounting credit card bills, unexpected medical bills and widespread job loss as a result of the weakened U.S. economy are all reasons people consider bankruptcy. But consulting with an experienced Louisville Bankruptcy Lawyer to go over all possible options should be the first step to financial freedom.
Unlike the federal government, average Joes and Janes can’t simply raise their own debt ceiling. So, how does one tackle living beyond their own means? Forbes.com provides some solutions:
See if you can refinance debt with a lower interest rate: Interest rates are near record lows and while the government can borrow money fairly cheaply, personal credit cards aren’t necessarily the same way. Sometimes a person can transfer high rate balances to credit cards with low or zero interest rates for at least a period of time. Balance transfer fees and other hidden costs could apply, so beware.
Borrowing from your home equity and retirement plan are also options, but they each have positives and negatives. Home equity loans tend to be tax-deductible, but they require good credit and some equity. Retirement plan loans don’t require a credit check and the interest goes back into your account, but money won’t be growing for your retirement and you may owe taxes, according to Forbes.com.
Find out where the money is going and try to cut back: The news has been full of politicians saying the country needs to cut back on wasteful spending. While little actually usually gets cut, it makes for good news clips.
But for the average citizen, cuts may be necessary. Forbes suggests looking at three months of bank and credit card statements. If there’s not enough fat to cut, a person may have to prioritize spending. Eating out less and going to the movies less may be options to consider.
Start paying down debt: If you’re able to free up savings each month, putting it toward debt with the highest interest rates and making the minimum payments on the rest may be a good strategy. But if someone is struggling to make even minimum payments, a payment plan with creditors may be an option. Bankruptcy is also an option.
Stick to a “balanced budget amendment:” Consider not borrowing except for things that can appreciate, like a home, or things that can provide more income, like education or a car for work. Avoid credit card debt, continue tracking spending and don’t go over budget.
While these are sound financial tips, they won’t work for everyone. Many people are so overwhelmed with debt that they can’t come up with a budget or come up with a system to balance their bills. For those people, considering bankruptcy in Louisville may be an option to explore. Filing for bankruptcy immediately stops creditors from calling and can provide a fresh start financially that many people covet.
If you need to speak to a Kentucky bankruptcy attorney or Louisville foreclosure defense firm, contact the Schwartz Bankruptcy Law Center at 866-270-4495 for a free and confidential consultation to discuss your rights.
More Blog Entries:
Kentucky Bankruptcy and Student Loans: July 27, 2011
Louisville Foreclosure Defense Attorneys Continue to Monitor Kentucky Real Estate Market: July 20, 2011
4 Steps to Deal with Your Own Debt Ceiling, by Liz Davidson, Forbes.com