How to Overcome Debt in Arizona?
A financial situation that becomes too troublesome will prompt you to seek a solution. While an Arizona bankruptcy is one of the options, there are a few other opportunities for resolving debt and moving forward with your life.
Communicate with Creditors
If you’re drowning under the burden of debt, you will certainly need to communicate that information with creditors. It’s in everybody’s best interest to find a mutually beneficial solution.
Depending on the circumstances and the amount of debt you’ve accumulated, it may be possible to get a new repayment schedule or to have your creditor reducing the interest rate.
Once you negotiate such a plan, you can begin making payments that exceed the minimum. Paying more than the minimum will help you reduce the repayment period, which will enable you to save further on the interest rate.
The Snowball Method
Some consider the snowball method one of the best options for getting out of debt.
Begin by creating a list of all your debts. Arrange them in order from smallest to largest. Next, put excess funds towards the smallest balance and maintain the regular minimum payments on all other debts. Once you’ve managed to clear off the smallest balance, you can move on towards the next debt in the list.
The snowball method makes sense for those who have a fairly stable income or some saved money. Over time, the smaller balances will disappear, allowing you to focus on the other remaining debts.
A variation of the method is to list the debts from highest to lowest on the basis of interest rate. Tackling those that have the highest interest rate first will enable you to get out of debt and save some money along the way.
Debt consolidation is also a popular method to manage individual loans/credits and to pay off everything faster.
This method refers to getting one personal loan with relatively low interest rate. The money from that loan is used to pay off all other balances at once. In the end, you’ll be left with making a single payment on the personal loan.
Personal loans often come with lower interest rates than other types of debt. Hence, consolidation makes financial sense. In addition, it provides the added convenience of making just one payment per month. Hence, there’s no risk of missing a payment and having to deal with penalties as a result.
Many people in Arizona view bankruptcy as a last resort option but it doesn’t have to be.
Chapter 7 bankruptcies are suitable for discharging unsecured debt and getting a new start. Even if you don’t qualify for a Chapter 7 bankruptcy, there’s a Chapter 13 filing as an alternative option. In that case, you’ll get a manageable repayment plan that will help you get your finances in order.
If you’ve never considered a bankruptcy in the past, go see an Arizona bankruptcy attorney. Your lawyer will shed some light on the chapters, whether asset liquidation will have to take place and if bankruptcy is the best option for you.
A bankruptcy attorney can also guide you through debt settlement – another process you may want to employ in an attempt to overcome the significant financial burden that your family is facing on a monthly basis.
Once you feel that you simply cannot keep up with repayments, you should start seeking a comprehensive solution. When you ignore the issue, it will become much more difficult to manage. Seek a financial counsellor or a bankruptcy attorney, especially if you’re hesitant about the adoption of a more radical solution towards debt resolution.
Click here to find out what happens to employees when filing business bankruptcy.