5 choices to relieve your debt

Though nobody loves being broke, making just enough to get by, I have heard the phrase, “I can live with being broke, but being in debt stinks.”

Trying to manage oppressive debt is an incredible burden to handle. With debt comes financial stress and anxiety, which in turn has hurt you and your relationships. Getting out of debt can be a tall task, but it certainly isn’t impossible.

If you decide you want to get out of debt, you have five options.

  1. Make more money.

Whether you accomplish this through a promotion, a second or third job or a legal side hustle, you should put the maximum amount of additional income toward your debts. When and if the debt becomes more reasonable, continue placing the maximum amount of extra income toward paying off your debts, while also understanding that you must also take care of yourself.

  1. Lower your expenses.

This strategy could include downsizing, cutting out anything that isn’t necessary (cable, streaming subscriptions, selling your car if you can live without it, etc.), or a mixture of both.

This strategy consists of doing whatever it takes, aside from making yourself homeless, to free up funds to pay off your debts. If may not be a fun decision but is seen as a necessary evil to get the debt weight off your back.

  1. Make payments (and extra payments).

Maybe you’re doing financially well, but just made some poor financial decisions, like racking up thousands of dollars on credit cards, and if you don’t make a drastic change, things could get majorly out of hand. If this if the case, make payments and pay more than the minimum. Especially with credit cards that generally have high-interest rates, making the minimum payment is like flushing money down the toilet.

Unless you owe a meager amount, which in these instances, wouldn’t be the case, the minimum payments are eaten up by the interest. Continuing down that path would see you paying thousands more over the life of your debt. Pay more and, if able, put money toward a couple of extra payments each month to stave off the accruing interest.

  1. File for bankruptcy.

Filing for bankruptcy seems scary, but it’s relatively common. More than 760,000 people made the conscious decision to file for personal bankruptcy in 2017, working toward clearing their oppressive debt. If you choose to file for personal bankruptcy, you have two options: Chapter 7 and Chapter 13.

Chapter 7 bankruptcy is commonly known as “liquidation bankruptcy,” where your non-exempt property, like your house or car, (if you have too much equity in them) is used to pay off your debts. Non-exempt assets change from state to state, because what is exempt changes from state to state. Chapter 7 is a common choice for individuals who don’t have much disposable income to put toward a repayment plan and their assets fit within the state’s exemptions.

Chapter 13 is a good choice for those who do have enough income to begin a repayment process. Once approved, creditors can no longer harass you or take legal action against you to collect their owed debts. Chapter 13 also halts the foreclosure process, which allows you time to catch up on your mortgage payments.

No matter the bankruptcy decision you make you will feel a sense of relief as the debt load will have been taken off your back, giving you a fresh start.

  1. Do nothing.

Really? Doing nothing does not solve the problem and matters only continue to get worse. You are already reading this blog because you know you need to do something.