As the year comes to a close and we reflect on our successes and failures, we often turn to the New Year’s resolution to mark a moment in time where we will set ourselves on a new path. While the large majority of New Year’s resolutions revolve around health, it is estimated that 30% of individuals make a resolution related to their finances, with the most common one being that of getting out of debt.
Individuals who resolve to get out of debt in 2018 will likely find that putting the resolution into action can be overwhelming. We completely understand the difficulty, as getting out of debt is easier said than done. You might have questions such as: “Where do I start? What resources are available to me? Who do I consult?”
Here are 3 tips getting out of debt in 2018:
1. Lower Your Interest Rates or Payments
High interest rates make a significant impact to your overall debt, making it much more difficult to pay it off.
However, you might be eligible for better interest rates on your credit cards. Call your card issuer and ask them to lower your interest rate on your balance. Oftentimes, if your account has been in good standing through the majority of the loan, they can make an adjustment to your interest rate for the balance.
Don’t forget to check the interest rate on your auto loans as well. If you have a high interest rate auto loan, we recommend contacting your loan company to see if you can refinance at a lower rate.
With both types of debt, you may be able to negotiate your payment amount, so don’t forget to ask about alternative payment plans.
2. Get a Consolidation Loan or Do a Balance Transfer
When lowering your interest rates or payments through your current credit card and loan issuers is not an option, you may want to consider a consolidation loan or balance transfer.
A consolidation loan combines all of your smaller loans into one larger loan. The benefit to a consolidation loan is that it often reduces the interest rate and extends the loan over a longer period of time so that the monthly payment amount owed is reduced.
A balance transfer is where you take all or part of your debt and transfer it from one lender to another. A balance transfer may be a good option if you are able to find a new credit card with lower interest rates than your existing credit cards.
Be sure to select a lender with no balance transfer fees and no increase in interest rates over time. If the interest rate will increase over time, be sure that the introductory period is long enough to pay the balance off in full.
3. Consider Filing for Bankruptcy
If you’re unable to make adjustments to your debts and your financial situation is dire, then filing for bankruptcy may be your best option to help get a fresh start. Bankruptcy is a complex process that can prove to be overwhelming, so it’s best to consult an attorney to help you decide whether or not bankruptcy is a good fit for your financial situation.
Having your finances on the right track is incredibly important for your future, and we are here to help. To learn more about filing for bankruptcy in Florida and whether this is the right option for you, contact our office today and take advantage of our complimentary initial bankruptcy consultations.