Keeping Your Debt Repayment New Year’s Resolutions
2021 has been a year of feast or famine, where evidence that things were getting better alternated with the all too familiar feelings of impending doom. Debt and your constant strategizing to repay it were parts of your life even before the COVID-19 pandemic. During times when there was no place to go and nothing to buy, people who were fortunate enough to have stable employment were able to pay down substantial amounts of consumer debt. Many of us splurged this past holiday season, though, eager to get in as much fun and festivities as we could because, with the omicron variant, there was no telling when it would be safe to travel or attend social gatherings again. Now 2022 is upon us and we are stuck with a new mountain of credit card bills. The old familiar tactics of consumer debt repayment still hold true. 2022 may be a good time to renew the financial New Year’s resolutions you made at the beginning of 2019. If your debt problems are considerably bigger than they were three years ago, though, contact a Philadelphia debt collection attorney.
Variations on the Snowball Method of Debt Repayment
The goal is to pay off all your debts, but it is usually easiest to start by putting as much money as possible toward one debt while keeping up with minimum payments on the others. Helen Forward, a Money Expert at Chip, advises consumers to start by focusing on the most expensive debt, which usually means the one with the highest interest rate. For most consumers, that debt is a credit card balance or unsecured personal loan. While starting by paying off the debt with the highest interest rate would save you the most money on interest in the long term, some people find it easier to start by paying off the debt with the lowest balance first; seeing that first debt get paid off and disappear from your monthly budget can give you the encouragement you need to keep paying off the others.
Consolidating Your Debt
In some cases, the least expensive option is to consolidate your debt. This involves taking out a low interest personal loan and using it to pay off as much high interest debt as possible. Consolidating your debt can save you money on interest and lower the amount that you must spend each month on debt repayment.
When Your Debt Problems Are Too Big to Fix With a New Year’s Resolution
Consolidating your debt works well when you have an income and will be able to keep up with or exceed monthly minimum payments on the low-interest loan. If you are without an income, or if your debts are so big that a low-interest personal loan would not make a dent in them, filing for bankruptcy might be the best option.
Contact an Attorney for Help
A consumer law attorney can help you find a realistic solution to the debt problems that have been following you around for years. Contact Louis S. Schwartz at CONSUMERLAWPA.com to set up a free, confidential consultation.