Tackle Your Chicago Debt Ceiling Without an Act of Congress
Now that lawmakers have "solved" the debt crisis by adding to it by a few trillion dollars, it may be a good time to take a look at our own finances. Most people don't have the power to add a few trillion dollars to their own debt ceiling, so let's look at some other alternatives.
Forbes.com recently published four tips to working on your personal debt. Credit card debt and other lines of credit have sent people into debt that is often unmanageable.
Filing for bankruptcy in Chicago, however, immediately stops creditors from harassing consumers and allows them a fresh start. But the process is complex and is best handled by an experienced Chicago Bankruptcy Lawyer.
Job loss, unexplained medical bills and predatory lenders are some of the biggest reasons people consider filing for bankruptcy in the first place. So, making sure you are able to climb out of debt is smart. However, it may not work for everyone.
Here are some tips to improve your finances:
Attempt to refinance your debt at a lower interest rate: Interest rates are nearing record lows, so it may be possible to transfer debt from a high rate balance to credit cards with low or even zero interest. Be careful about expiring deals, though.
Other options include borrowing from home equity and retirement plans, but those have pros and cons, too. You're putting your home on the line if you can't pay through home equity loans; while credit checks aren't required for retirement plan loans, you may be in line for a tax hit in the future.
Determine where you're spending and try to cut back: Cuts, cuts, cuts, seems to be the mantra in Washington D.C., but they rarely do it. Take a look at your personal spending over three months of bank and credit card statements. See how much you spend on eating out and entertainment. Try cutting back.
If you believe you're as thin as possible, prioritize spending. Pay house bills, food, utilities and transportation. It's better to be late on a credit card payment than being evicted or having things repossessed. Try to spend less than you take in.
Pay down debt: If you have a little extra left at the end of the month or you get a bonus at work, don't blow it on a fancy dinner or a new dress. Pay toward what you owe and the balance that has the highest interest rate. After one balance is paid off, go to the next.
For those having trouble making minimum payments, creditors may be open to working out a payment plan. However, they sometimes are difficult to work with and Forbes suggests considering bankruptcy.
Stick to a "balanced budget amendment": Track your spending on a monthly basis to determine what you're spending and have the resolve not to go above that. Break up spending into monthly increments and take irregular spending, like vacations and holiday shopping, and break it down into a monthly cost.
Try to save up three to six months of expense dollars in an emergency fund. If there are months where you spend less, put the money aside. And consider giving yourself an allowance that you won't go over for food and shopping.
These are all good tips, but they don't apply to everyone. Many people are hurting and aren't able to take all these steps. For many people, they feel so overwhelmed with debt, they can't comprehend having money left at the end of the month for savings. For these people, filing for bankruptcy in Chicago may be a good option.
Consulting with an experienced Chicago Bankruptcy Lawyer should be your first step if you're in this position. There may be other options besides bankruptcy, but getting sound advice is necessary. Call today.
If you need to speak to a Chicago bankruptcy attorney call the DebtStoppers Bankruptcy Law Firm at 800-440-7235 today for a free debt analysis. Call 800-440-7235.
More Blog Entries:
10 Ways to Avoid Credit Card Debt in Chicago: May 30, 2011
4 Steps to Deal with Your Own Debt Ceiling, by Liz Davidson, Forbes.com