Tips to Get Out of Debt and Avoid Bankruptcy
Issue date: 5/3/09 Section: FYI
Food, clothing, shelter and transportation -- focus on these basics when you start to determine which expenses are essential and which are not. Start a monthly budget by tracking your expenses against take-home pay (cash flow). Cut the non-essentials and look at how you can reduce the costs of your essential expenses. For example, stop dining out and instead take your lunches to work and make meals at home, or reduce your transportation costs by taking public transportation instead of driving to work. Likewise, start to look for opportunities to increase your income, from taking on a second job to selling household items on eBay or Craigslist.
Pay Essential Debts First.
Paying all of your debt down is important, but there are some bills that are more important the others. Go back to the basics -- mortgage, electricity, heat, water, etc. This may sound obvious, but when pressured by bill collectors, many people forget the obvious.
Don't Skip These Expenses.
Depending upon the laws in your state, there may be some expenses that you must incur, such as auto and medical insurance, student loan payments, child support payments, license fees, and of course, paying local taxes as well as state and federal income taxes. Skip any of these expenses and you may wind up with a much bigger headache.
Go Automatic.
Have your employer automatically deposit your paycheck into your bank account. But don't stop there. Arrange for the most essential bill payments -- mortgage, electricity, heat and water -- to be automatically withdrawn from your checking account. If you have a mortgage, escrow property taxes to ensure that they're automatically paid.
Cut the Lattes and Lottery Tickets.
Now is the time to cut back on all of those little non-essentials that eat up your budget -- the lattes at your favorite coffee shop, buying lottery tickets or purchasing that mid-afternoon candy bar or soda from the company vending machine.
Beware of Credit Scams.
Beware of ads and phone calls from debt management companies that tend to target consumers with poor credit histories, promising (for a fee) to clean up your credit so you can get a car loan, a home mortgage, insurance or even a job. The telltale sign that it's a scam is if the company demands payment up front for their services.
For more information about getting out of debt and avoiding bankruptcy, visit www.findlaw.com.
Courtesy of ARAcontent
Pay Essential Debts First.
Paying all of your debt down is important, but there are some bills that are more important the others. Go back to the basics -- mortgage, electricity, heat, water, etc. This may sound obvious, but when pressured by bill collectors, many people forget the obvious.
Don't Skip These Expenses.
Depending upon the laws in your state, there may be some expenses that you must incur, such as auto and medical insurance, student loan payments, child support payments, license fees, and of course, paying local taxes as well as state and federal income taxes. Skip any of these expenses and you may wind up with a much bigger headache.
Go Automatic.
Have your employer automatically deposit your paycheck into your bank account. But don't stop there. Arrange for the most essential bill payments -- mortgage, electricity, heat and water -- to be automatically withdrawn from your checking account. If you have a mortgage, escrow property taxes to ensure that they're automatically paid.
Cut the Lattes and Lottery Tickets.
Now is the time to cut back on all of those little non-essentials that eat up your budget -- the lattes at your favorite coffee shop, buying lottery tickets or purchasing that mid-afternoon candy bar or soda from the company vending machine.
Beware of Credit Scams.
Beware of ads and phone calls from debt management companies that tend to target consumers with poor credit histories, promising (for a fee) to clean up your credit so you can get a car loan, a home mortgage, insurance or even a job. The telltale sign that it's a scam is if the company demands payment up front for their services.
For more information about getting out of debt and avoiding bankruptcy, visit www.findlaw.com.
Courtesy of ARAcontent
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