Tackling your debt in 2014

Tackling your debt in 2014

Forum topic posted in Forum on 16 January 2014| comments
audience: | last updated: 16 January 2014
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ruwilatolj's picture
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It’s a new year, and that means time to make New Year’s resolutions. Right up there with exercising and eating better is improving one’s financial situation. You may have made this resolution before but if you’re determined, 2014 could be the year you get your finances in order and tackle that debt that’s been hanging over you for years. Here’s a look at five ways you can start eliminating your debt in 2014.

Take care of your mortgage

In most cases, your mortgage is your largest debt, and the most difficult to get rid of. If you owe a lot more than your home is worth, foreclosure is pretty much inevitable unless you take certain steps. There are several options available. One is to pursue a loan modification. If you qualify for a loan modification you can be paying a more manageable amount each month. Another option is to consider a short sale. If your lender will agree to it, you can sell your home at below market cost and finally get out from under that mortgage.

Consider child support

If you’re one of the millions of Americans raising children alone, it may be time to start collecting child support. It may surprise you how many Americans are in debt but aren’t receiving the child support that is owed them. There are child support enforcement agencies that can assist you in getting child support for free.

Don’t let zombie debt weigh you down

When a business decides to cut their losses, they sell the right to collect on unpaid debts to collection agencies. Unfortunately, the only way to get rid of zombie debt entirely is to pay it off or file for bankruptcy. In the meantime however, it isn’t a crime to ignore debt collection agencies. If they have your phone number, you may want to consider changing your number
and making sure only close friends and family know it.

Change your lifestyle

A lot of times, excessive debt can’t be helped, such as with divorce, death of the provider, or medical emergencies. In many cases however, debt is the result of irresponsible spending. If you know that you have difficulty controlling your spending, it’s time to create a budget and stick to it. Learn to live with less and your financial life will become a lot less stressful.

Consider bankruptcy

While it isn’t ideal, in many cases bankruptcy may be the best choice to get out of debt. If you are in deep debt and are unlikely to be able to pay it off yourself, you are only making your situation worse as interest on unpaid debts continues to accumulate. It may be time to talk to a bankruptcy attorney.

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