Many Consumers Have No Debt Relief Plan

According to LendingTree research, more than a 1 in four of Americans don’t have a set strategy for paying off their debt. As U.S. household debt exceeds $15 trillion, this is a major national issue. Although there is a lot of advise aimed at reducing debt, having a plan to do so is the most crucial and useful piece of advice.

Mortgage debt makes up the majority of household debt in the United States. Student loan debt and vehicle loan debt are the second and third largest types of debt held by Americans, after mortgages. Credit card debt is the fourth largest type of household debt in the US. With this knowledge, the majority of people can create a strategy for debt repayment. The majority of Americans who actually have a plan to pay off their debt are those who have mortgage debt, according to the percentage of Americans who do so.

Without a firm plan to pay off your debt, problems such as late payments and credit issues can arise. When beginning on your journey to pay off debt, it’s important to take a look back at what caused the debt in the first place and if it is due to normal circumstances beyond your control or if it is due to overspending or over-borrowing. For instance, medical debt resulting from treatments not covered by insurance may indicate the need for further protection. If problematic spending habits led to the debt, this may be a sign that they need to be corrected before moving forward.

It’s time to decide how much debt you can afford to pay off, adding to that amount when you receive extra income, after you’ve examined your debt and determined how much you actually owe. You need to work on using all of your discretionary income (money left over after meeting basic needs) to pay off your debt, just like in a Chapter 13 bankruptcy. Once you have this knowledge, create a budget that will assist you in paying off your debt and follow through with it.

If you are experiencing overwhelming debt and may be at risk of losing your assets, contact one of our experienced Hurst bankruptcy lawyers for more information about your debt relief options.