Some California residents see debt troubles coming as their financial challenges progressively get worse. For others, the problem just seems to come out of nowhere, due to a sudden loss of employment or unexpected medical expenses. No matter how it happens, being in debt can have a number of significant impacts on an Escondido resident's life, including poor credit and harassment from creditors. So, once a trying debt situation is at hand, what is the best way to approach the problem, besides filing for bankruptcy?
According to a recent article, one of the most effective ways to start paying down debt is known as the "debt snowball." Some aspects of this approach have been mentioned in previous posts here, but the basic proposition of this debt repayment plan is to start paying off the lowest debt burden first and then proceed debt-by-debt toward paying off the higher ones.
Of course, before Escondido residents would be able to kick this plan into gear they should take stock of their entire debt situation. Some people carry balances on multiple credit cards, in addition to loans on cars and homes. The recent article suggests that all debts need to be stacked in order of amount, lowest to highest, and while minimum payments are made on all of them extra funds should be applied toward the lowest debt on the list. Then, once that debt is paid off, the debtor can move on to the next one on the list.
Making a plan for paying off debt is always a good thing. But for those who find themselves in a situation where even a sound repayment plan probably won't help, filing for bankruptcy could be the answer.
Source: The Huffington Post, "4 Ways to Get Your Debt Snowball Rolling," Rob Berger, April 8, 2014