Helpful Debt Relief Tips, Including Key Assistance from a Debt Relief Attorney
Although the items we buy haven’t gotten any less expensive, most people’s spending habits during the holidays haven’t slowed down, either. After all, you don’t want to kill the spirit just because of the economy – and that may mean that you’ve taken on more credit card debt than you anticipated.
According to Retail Dive, the average holiday shopper racked up about $1,500 in debt. When 60% of adults in the U.S. are living paycheck to paycheck, $1,500 dollars isn’t likely coming from a savings account.
That means you’re stuck with that debt, which will accumulate high interest month to month, if you don’t find a way to pay it off. Unfortunately, too many Americans have experienced the snowball effect of debt. Although your goal was to make the holidays special, soon that $1,500 will double in size if you’re unable to pay off the full balance.
That holiday credit card balance is probably not the only debt that’s currently weighing you down. Medical bills, your other credit cards, and more are likely making matters worse. However, you can bail yourself out now, if you decide you don’t want to let your debt get further out of control. Remember, you stop accumulating debt when you start being proactive about it. You can pretend it doesn’t exist all you like, but the reality is that this number continues to grow due to interest and penalties.
If you want to learn how to get out of debt, follow these three tips, including working with a law firm for debt relief near you.
3 Tips for Debt Relief After the Holidays Are Over
Now that the opening of presents is done and the strings of lights are back in the basement, it’s time to look at your debt. Try the following strategies to set yourself up for success after an expensive holiday season.
-
Reassess your budget and make small payments: The end of the holiday season and the new year are perfect times to reflect on your past year’s budget or even start budgeting for the first time. Financial resource articles often recommend the “50-30-20” rule, where you allocate 50% of your income for needs, 30% for wants, and 20% for savings. Look at your last month of spending. Where can you reduce your wants and save more?
Once you’ve found some areas you can trim down, you can put that money toward your credit card debt. Aim to pay off more than the minimum each month, or your interest will accumulate faster than you can pay. Once you’ve paid it off, that money can then go to savings. Be sure to reward yourself as well for paying off your debt with a small treat. This will motivate you to keep paying off your debt each month. In addition, you’ll see your credit score increase, which is useful in a number of ways.
-
Increase your income: If your holiday debt’s interest rate is going to make it difficult to pay off your credit cards monthly, you may need to consider increasing your income with a temporary part-time job. Many part-time jobs don’t expect you to stay on for a long period of time, so you can set a goal that you’ll work until your debt is paid off. At that point, you can decide whether having that extra income is worthwhile for you, or you can drop the job entirely.
-
Debt consolidation could be helpful, but proceed with caution: Debt consolidation as a solution to get help with debt is often misconstrued as debt relief. True debt consolidation entails taking out a loan at a lower interest rate to pay off debts with higher interest rates.
However, many misleading companies market themselves as providing debt consolidation but are really providing a debt settlement service. Although this service may get you out of debt for less, these companies are not being honest about the risks associated with their service, including the risk of lawsuits from your creditors and negative reporting on your credit. These companies are deliberately misleading you because they care only about earning exorbitant fees. As a result, they mislead you about the risk of what you’re doing, so you’re more likely to sign up. And they set up settlements which are designed to earn them fees as soon as possible, instead of getting you out of debt as cheaply as possible.
-
Reap the benefits of a reputable law firm specializing in debt settlement services: Although the dishonest debt settlement companies give the industry a bad name, there are reputable law firms which provide this service with honesty, and a focus on getting you out of debt as cheaply as possible at a fair price. An excellent law firm can help you settle for less and faster than their competitors, and can also advise you on whether bankruptcy is a better option because they provide a full suite of debt relief solutions. If bankruptcy is not right for you, debt settlement tends to be the option that will save you the most money.
To get the most out of debt settlement, contact a lawyer for debt relief near you. A debt relief attorney will negotiate with your creditors, so that you pay one lump sum – about 50% of the total amount you owe on your unsecured debt. Unsecured debt includes bills from creditors that are not backed by assets. For example, medical and credit card debt are unsecured, while mortgage and car payments are not.
While this solution works best if you can save for that lump sum in about six months, you could potentially also create a payment plan to pay that 50% in monthly payments. You will be debt free with improving credit within 24 months, all without having to pay the full amount you owe.
Debt Relief Is Up to You, But Debt Relief Attorneys Can Help You Find the Best Solution
If you’re ready to find out how to get out of debt, the first three suggestions above will help you get started on your journey to debt relief.
However, keep in mind that small payments, seeking out extra income, and debt consolidation all come with downsides, namely that you will end up paying off the entirety of your debt plus interest. Debt settlement is the only option that allows you to settle for less than the amount you owe.
Whatever you decide, consider getting help with debt from a lawyer who specializes in debt relief near you. Many attorneys offer free consultations, so you won’t be obligated to work with them. During that consultation, however, you can explore your options.
To learn more about debt settlement in comparison to other forms of debt relief, start with this article, which compares debt consolidation with debt settlement.