Reducing Debt

A young man sits with his head in his hand in an office while another young man goes over paperwork across from him at a desk

Millions of Americans struggle with debt, and finding a way out of what can feel like an overwhelming obstacle can feel difficult, if not impossible. Luckily, members of our Legal Protection Subscription Plans for Individuals & Families can get legal advice and assistance to negotiate debt settlements with your creditors or help with a collection issue, all for just one, low monthly fee. Learn more about the benefits of membership and read on for a few tips about managing debt.

Gather Your Information

The first step is almost always the hardest, so start by making a list of your creditors and how much you owe. If some debts have gone to collections, take note of the original creditor and the company managing the collection action. Gather letters, invoices, bills, and other pertinent documents as your attorney will need to review them.

Make Sure The Debt Is Yours

It happens more often than people think. An entire cottage industry of fraudulent collection companies use intimidation tactics to convince people to pay debts that aren't theirs. Some of these companies will try to get you to pay for a family member's debt. Additionally, cases of mistaken identity do happen in the collection business, so carefully examine all bills you receive to ascertain if the debt really is yours.

Create A Budget

Managing debt means knowing what you owe and how much you can afford to pay to whittle down your debt. This requires taking a long, hard look at your finances and cutting unnecessary purchases and expenses where possible, as well as committing to a certain amount each month toward your debt repayment. Even a small amount will make a difference over time.

Decide Which Debt Is A Priority

Developing a strategy for paying back your debts can also be helpful. Know which debts are secured and which are unsecured. Secured debts are typically for larger purchases, such as your house or your car, so making these your top priority will mean that you don't lose these assets. Your next priority will be to any court-ordered payments, such as child support or alimony, as you don't want to risk an issue with the courts. After these, it's often helpful to organize debts by interest rate so that you are paying more to your highest interest rate debts, thus paying them off faster, lowering your total debt over time. Lastly, any debts that are already in collections or are soon headed that way will need to be dealt with either through negotiating a payment plan or some form of consolidation in order to avoid any additional legal fees.

Negotiate Payment Plans

Many creditors are happy to negotiate payments or a settlement amount that is lower than what they say you owe them. Make sure to get the agreement in writing, and your attorney through our Legal Protection Plans can help you negotiate with creditors, collection agencies, and others to lower your monthly payments. Your attorney can also review contracts and documents for such agreements you've negotiated yourself to protect your rights and your money.

Consolidation

While consolidation is one way to handle mounting debt, it is worth noting that there are fraudulent entities in this industry, as well; our attorneys hear from members all the time who were taken in by promises from consolidation companies to reduce or eliminate debt and the promises never materialized. Review contracts and agreements with consolidation companies with your attorney to make sure that you're not being taken advantage of - or will end up paying more than you owe - before you sign any paperwork with a consolidation company.

Bankruptcy

Bankruptcy isn't the black mark that some people think it is; it doesn't mean that you're a failure if you have to declare bankruptcy. In fact, bankruptcy can provide you with the recovery and new start that you may need. As always, your attorney through our Legal Protection Plans can help you decide if bankruptcy is the right choice for your financial well being and assist you with the paperwork and documentation needed to file for bankruptcy in your state and county.

In the end, there are many ways to manage debt and your attorney will be able to help you in numerous ways to get you back on your feet and thriving again, all for one low, monthly subscription fee. Learn more about all the benefits of membership in our Legal Protection Subscription Plans for Individuals & Families or sign up today!