If you are struggling to stay current on your credit card accounts, it may be a good idea to consider filing for bankruptcy. However, there may be other methods of paying down your outstanding balances without having to appear before a Florida judge. Let’s take a look at some of the tactics that you might be able to use to get out of debt and build a stronger financial future.
Consolidating your debt may help you save money
Transferring your debt to a new card with a 0% interest rate allows you to put more of your monthly payment toward your principal balance. Furthermore, it may also significantly reduce your monthly payments, which may make it easier to save for retirement or build an emergency fund. You may also be able to consolidate your debt with a personal loan if you don’t qualify for a balance transfer.
Your creditors may be willing to work with you
There is a chance that your creditors may be willing to make it easier to get a handle on your debt balances. For instance, they may reduce your interest rate for several months to ensure that you make your payments on time. In some cases, credit card companies will waive the interest on your account entirely for several months. In extreme cases, a lender may forgive some of your debt in exchange for an agreement to close your account.
When is bankruptcy right for you?
If you don’t think that you can repay your credit card debt in the next five years, it may be best to file for bankruptcy. The same is true if your debt payments are more than half of your income before accounting for taxes. Finally, bankruptcy may be ideal for those who don’t have assets a trustee could liquidate.
Taking steps today to get a handle on your credit card debt may save you thousands of dollars in interest and other fees. A financial adviser may be able to help you learn more about how to pay it down in an effective manner.