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How to find debt relief on a limited budget

For many Americans, including those in Tennessee, eliminating debt can be frustrating. Often the tide of debt continues to rise even as the debtor works hard to repay it. To survive the rising tide, a debtor may be better off looking at the debt relief options that are immediately available.

Start with a payment plan. List all your debts, as well as the names of people and establishments to whom you owe money. Using the interest rate, loan terms and total amount for each account owed, determine how much of the debt you can pay each month. Debt calculators are available online to help with the computations. By looking at your debt closely, seeing what is required to pay it down and then following your plan closely, you can gradually pay off your debts and stay financially afloat. With some lenders, you also may be able to negotiate better loan terms or a better repayment plan.

Use automatic deductions. Some people struggle more than they should to pay off debt because they put it off. An automatic deduction can prevent that. Payments are deducted from a paycheck or bank account without you having to think about it.

Change spending habits and cut costs. A little belt tightening can go a long way. Set up a budget and trim unnecessary expenses such as eating out or going to the gym or the movies. Instead, eat and work out at home and rent movies.

As effective as these tips may be for any Tennessean who has debt trouble, they may not be enough if the debt is overwhelming. In these situations, filing for bankruptcy may be the only way out. Chapter 7 bankruptcy can eliminate debts through liquidation. Chapter 13 bankruptcy uses repayment plans to help debtors settle their debts while keeping their possessions.

Source: Personal Finance CheatSheet, "5 Tips for Getting Out of Debt on a Limited Budget," Sienna Beard, Oct. 10, 2014

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

Phone: 423-624-4002
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