A brief guide to managing debt

People should be aware of the best ways to manage their debt in order to keep it from getting out of hand.

Having some amount of debt is common for people in Tennessee, as even something as simple as having a credit card to regularly make payments on is considered a good way of building credit. However, when student loans, house and car payments, and medical fees begin to add up, poorly managed debt can quickly begin to spiral out of control. In the worst-case scenario, people may end up being harassed by debt collection agencies, having their wages garnished or even needing to file for bankruptcy. Properly managing debt is an important skill for anyone to have, and it will provide lifelong benefits.

Basic debt management tips

Typically, debt issues begin when payments cannot be made in a timely manner, usually as the result of people being unable to meet multiple obligations. When multiple interest rates pile on to one another, it can add up to a lot more money that is owed. That is why consolidating debt into one loan or credit line which is used to pay off the separate debt can be a good way to reduce the overall amount paid. If someone has been making payments regularly, they can also contact their creditor to see if they qualify for lower interest rates. Another important step to take is to make a budget of income vs payments, and not take out loans that will throw this budget out of balance.

Tips for settling debt

If one or two payments are late, it is not the end of the world. The important thing is to not continue waiting and leaving bills unpaid, but to instead try to take steps to resolve the issue as soon as possible. In order to avoid debt being sent to a debt collection agency, one thing people can do is to call the company they owe money to. Oftentimes a creditor will be able to work out a payment plan with a debtor that serves as a fitting compromise between the needs of both. This often leads to lower payment amounts; however, the debt would then be owed for a longer duration.

Another option for some people is to talk to a credit counselor. Credit counselors can be found via the U.S. Cooperative Extension Service, in military bases, in universities and in credit unions. A credit counselor can help someone make a plan that works for him or her, and can talk to someone about his or her debt.

Dealing with excessive debt and the possibility of losing assets is stressful for anyone. If someone in Tennessee is struggling due to debt and is considering the possibility of filing for bankruptcy, it may be a good idea for him or her to contact an attorney in the local area who practices bankruptcy law.