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Debt relief solutions for Tennessee residents

Incurring debt is like digging a hole in the earth under one's feet. As a person digs deeper, it becomes harder and harder for that person to climb out. Sooner or later, it would be nearly impossible to get out of the hole. Some Tennessee residents are incurring this kind of debt, however, debt relief is not as hard as it seems. A few simple changes in financial habits can help a resident climb out of a debt hole and stand firmly on solid financial ground.

First, stick to a budget and build an emergency fund. Make a list of expenses and compare it to income. If the expenses outweigh the income, then trim spending fat by excluding unnecessary items, then arrange the expenses based on the order of importance. Remember to include debt payments in the list. Also, add an emergency fund to help finance unplanned circumstances, such as sudden unemployment and medical expenses without sacrificing the budget or incurring more debt.

Second, use the "island approach" or the "snowball method." This may seem like going on an island getaway or a ski resort vacation is indicated to run away from debt, but it is not. The "island approach" means using different cards for separate transactions, such as transferring debt to a card with no interest, thus eliminating interest payments. Different cards could also mean more rewards, which could lead to savings. On the other hand, the "snowball method" requires paying off the debt with the highest balance while paying minimum payments on others. When the highest debt has been paid, repeat the process.

Finally, Tennessee residents who are too deep in the debt hole may consider filing for bankruptcy. Chapter 7 or Chapter 13 bankruptcy could be filed, and depending on the person's situation, they might help an individual or family get through the financial challenges by using a legal solution.

Finding the appropriate debt relief solution might be difficult, so those considering bankruptcy should understand what the process entails. This will ensure they take the rights steps and have a realistic view of the situation.

Source: Daily Finance, "5 Ways to Help You Dig Out of Debt," Odysseas Papadimitriou, June 14, 2014

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Kenneth C. Rannick, P.C.
4416 Brainerd Road
Chattanooga, TN 37411

Phone: 423-954-7180
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Fax: 423-624-0509
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