There may come a time in your life where you are no longer able to keep up on the same financial path that you have been on. Maybe you technically can keep paying all of those debts but why would you want to do that forever? If you are ready to make a change and live without an abundance of debt hanging over your head, then you will want to consider the following tips.
When To Pay Off A Debt
If you have a large supply of extra funds and it would not hinder your day to day living right now, then you could just call all of your creditors, ask for the payoff amount for your loan, and pay it off. However, if that is not an option for you, then you need to go slowly. First, if you can, try to worry about paying off your debts one at a time and do not start to make these arrangements until you are free from seasonal obligations. For example, in good faith, you may make payoff arrangements with a credit agency three weeks before Christmas, but the holiday pressure might get to you and you could fail to meet your obligation.
What To Do When You Can’t Pay Your Debts
After sitting down to calculate your total bring-home income each month and the amount of your monthly expenses, you find that you are simply unable to crawl out of this financial hole on your own, you may want to consider something such as a California bankruptcy filing.
You will need to sit down with a quality bankruptcy attorney to discuss whether you qualify for a Chapter 13 or Chapter 7 bankruptcy. With the Chapter 13, you have a sufficient amount of income that would be deemed necessary to repay your debts under a payment plan created and protected by the bankruptcy courts. If you are too bad off financially, you may find that you quality for a Chapter 7 bankruptcy.
How To Prevent This From Happening Again
Once you get your debs under control, you will need to begin the planning phase so you never find yourself in this position ever again. A great way to improve your chances of being financially sound would be to set up an emergency fund and have at least a thousand dollars in it. This way, should a major appliance break or your furnace needs repaired in the middle of a cold winter, you will not have to worry about turning back to personal loans or credit cards to get the job done. The more you save in your emergency fund, the better off you will be.
Getting Professional Assistance
Should you find that you are continuing to have an on-going problem with debt, even after trying the previously mentioned tips, you will want to speak to a professional financial advisor. According to the Financial Planning Association, a financial advisor can help you set realistic goals, creates a comprehensive financial plan, and will help you adjust those goals and plans along the way as needed. There is a lot that can be learned from someone who has made financial planning their career.
While you may stumble across additional useful tips on your journey to financial freedom, this is certainly going to give you the best head start you could ask for. Before you know it, you will be free of the shackles your debts had placed on you and you will experience a sense of freedom that only comes from having a debt free life.