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Besides bankruptcy, how else can Californians approach debt?

For our Escondido readers, it can probably seem like every day brings a little good news and a little bad news about the nation's economy. The unemployment rate remains as unchanging as ever, but the housing market seems to be seeing a little bit of positive momentum. The national debt continues to spiral out of control, but at least the politicians in Washington, D.C., seem like they might be able to agree on the tax rates for next year before December 31. However, for the regular person just trying to get by, these issues can seem like they are a million miles away when all they are trying to do is make minimum payments and try to maintain their credit.

Escondido residents who are struggling with credit card debt while they wait for the economy to improve are probably looking for options. Of course, for those in the most dire of financial situations, filing for bankruptcy can be a viable option. Doing so will stop creditor harassment while the filer works their way toward a managed debt load, either through a structured repayment plan or through "liquidation." However, for those who still want to try to pay off those climbing credit card balances, there are some steps which were mentioned in a recent news story that can be taken to help accomplish that goal.

The first piece of advice is to pay more than the minimum payment due. Paying as much as the household budget will allow is one way to tackle credit card balances quickly. But, hand-in-hand with that first step is the second step - which is to make those payment toward the credit cards with the highest interest rates first. This will help keep interest from accruing, which would only increase the amount of debt owed.

The third piece of advice is to stop using credit cards, period. This part is common sense, really. No one can pay off their debt if they just continue to add on to it. The last piece of advice is to continue paying toward the debt until all, not just some, of the debt is paid off. After that, a new financial freedom will allow the household to reassess their expenditures.

Source: NASDAQ, "Eliminate Credit Card Debt for Good," Dan Caplinger, Nov. 19. 2012

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