File under non-bankruptcy options: What are some ways to pay down those credit card debts, stay out of New York bankruptcy, and possibly raise your credit score? Here are some answers:
(1) Obtain your credit report. By federal law, you’re entitled to up to three free credit reports from the three credit reporting bureaus for every 12-month period. The point is to see how much you owe and to whom (unreported private debts, obviously, won’t be included). Another benefit is finding any errors in your report. Stay clear of sites that require a monthly membership, like freecreditreport.com. AnnualCreditReport.com is one place to go. Click here to find out what the components of a credit score are.
(2) If your spending habits are difficult to control, then try ditching the card. Living on a cash budget is one way to go about it. One unorthodox suggestion is freezing the card itself in a block of ice (which won’t damage the magnetic strip) and then waiting for it to thaw when you need it.
(3) Use whatever budgeting mechanism works for you. Some people separate envelopes according to their expenses, others use spreadsheets. Planning ahead always saves hassles and often uncovers problems before they arise.
(4) The counterintuitive way to pay down debts is to start by saving money. Rather than trying to send every spare cent to the banks, it’s better to set money aside to help you through the kinds of emergencies that people usually rely on credit cards to get through. A fund of about $1,000 is usually enough.
(5) As for actually paying off the debts, there are a few strategies. Sometimes it’s better to wipe out small, low-interest debts to raise your morale; alternatively you can pay down the high-interest debt first to keep the interest rates manageable. It depends on your circumstances and your demeanor.
(6) Consider consolidating your credit cards onto one low-interest balance. This may require applying for yet another card but it might be worth it. Make sure that if there are any “balance transfer fees” that they don’t cost more than the lower interest rate is worth.
(7) If your debts have been sold to collection agencies, then it’s time to consider bankruptcy.
Credit card debt can become very problematic very quickly. If you can’t handle yours, contact an experienced New York bankruptcy lawyer to explore your options. Credit card debts are easily dischargeable in chapter 7 bankruptcy.
For answers to more questions about bankruptcy, the automatic stay, effective strategies for dealing with foreclosure, and protecting your assets in bankruptcy please feel free to contact experienced bankruptcy attorney Brooklyn NY Bruce Weiner for a free initial consultation.