Moving Beyond Debt

If you have bills that are a struggle to keep up with, or credit cards that never seem to decrease despite consistent payments, it may be time to make some changes to address your debt. This blog details some steps you can take to start assessing your financial condition and how to approach achieving your goals.

Assessing Your Finances

            Before thinking about how to eliminate your debt, it is important to assess your current financial well-being.

Make a list of your current debt obligations.

1. Gather all of your bills and letters
   1. Obtain a free credit report from www.annualcreditreport.com or by calling 877-322-8228.
   1. For each separate debt, write down:
      1. Is it secured, in other words, attached to a car, house, etc.?
      1. What is the total balance?
      1. What are the monthly payment obligations?
      1. What is the interest rate, if applicable?
      1. Are the payments current?

Where is your money going now?

1. Look at all of your financial accounts, including bank accounts, prepaid cards and online accounts, and create a list of all of the money coming in, as well as all of your expenses for the last three months. If you use cash a lot, starting now, write down each time you spend money.
2. From the income and expense list, add everything up to estimate your current budget.
3. Consider if there are areas you can cut back. Are you spending more than you need to on going out to eat for instance?
4. Are you able to put aside money regularly towards savings?

What are your assets:

1. Add up all of the funds from all financial accounts, including savings, life insurance, retirement accounts, etc.
2. Do you own real estate, vehicles, or any other significant assets?

What are your Goals?

            After you’ve reviewed your current finances, consider what your short-term and long-term financial goals are. Are you just looking to be debt-free? Do want to improve your credit score? Will you be purchasing a home in the next few years?

            Once you have conducted this personal assessment, you’ll have a better idea of your financial well-being. If you are able to adjust your budget to maintain your creditor payments, there may be some payment and/or refinancing options available to you to reduce debt, improve your credit score and achieve your goals. Or if the budget is not feasible and bills are moving to collection, a bankruptcy filing may allow you to stop negative credit reporting, move past the debt quickly and then work towards rebuilding your credit score.

            If you need help assessing your financial health, or are ready to review your options in tackling your debt, we have lawyers ready to speak with you today. Reach out to us today to get started. Since we are a nonprofit charity, all of our help is always free.