Debt is one of the most stressful elements of modern life. For many Connecticut residents, carrying debts like credit card balances, auto loans and student loans can be a heavy financial load, sometimes becoming overwhelming. Thankfully, there are a variety of debt relief options available, depending on the specifics of a particular situation.
The first step in tackling any debt is to create a plan. This means taking account of existing debts — many people do not realize how much debt they are carrying until they sit down and look at the big picture. Planning out a budget to handle that debt is also important: some experts suggest setting aside up to 20 percent of after-tax income to put toward debt repayment.
In the case where a debtor has multiple credit cards in his or her name, all carrying balances, there are two major methods used to pay them down. The snowball method instructs the debtor to start with the card with the lowest balance, and to pay down each card sequentially up to the highest balance. The avalanche method recommends paying down the card with the highest interest rate first, sequentially paying down additional cards down to the lowest rate.
The method that works best for a Connecticut family seeking debt relief is truly up to the individual. It may be beneficial to seek out the support of financial professionals to help structure a debt repayment plan. For some people, a Chapter 7 bankruptcy filing may be the best move to make in order to pay down existing debts and forgive others. This affords the filer a chance to “wipe the slate clean” and start fresh in the journey toward financial stability.