The average American has over $90,000 in debt. Debt is sometimes necessary to make large purchases or pay for necessary expenses. However, debt can also create financial hardship and stress. If you are struggling with your debt, these are three options you have to get out of it.
- Bankruptcy
Bankruptcy provides relief for people who are overwhelmed by debt by discharging most debts and wiping the slate clean. However, not all debts are eligible to be discharged in bankruptcy and bankruptcies remain on your credit report for up to 10 years. This may make it more difficult for you to obtain new credit or even cost you some job opportunities. Most people choose to file a Chapter 7 bankruptcy. However, those who have significant income or want to ensure they do not lose valuable property may choose to file Chapter 13 Weymouth instead.
- Budgeting
Budgeting is an important first step when you are trying to pay off debt. Experts recommend a 50/30/20 budget for people who are trying to get out of debt. With this budget plan, you set aside 50% of your income for essential expenses, such as housing, food and utility bills, 30% for things you want and 20% for paying down your debt. If you want to eliminate your debt faster, you can use some of the money from your wants category to make extra debt payments.
- Increase Your Earnings
Cutting your expenses is one way to pay off debt. Another is to increase your earnings. Options for this include asking for a raise at your current job, taking on a second job or adding a side-hustle.
Getting out of debt isn’t an easy task for most people, but it can be done. These three options will help you eliminate your debt and lower your stress level.
Shreyashi is a software engineer in the US. Along with her work schedule, she has managed to travel all the 50 States of the country and wants to pen down her experiences, journeys, and joys through her write-ups and share them with the world. You can find more details on https://www.travelthefoodforthesoul.com/about-me/
