Bankruptcy lawyer in Owosso shares tips for overcoming debt
November 10, 2021
Taking on debt can be a good thing. It provides a much-needed burst of cash flow that you can use to tackle pressing financial obligations. However, there is a dark side to taking on debt. In many ways, it’s like a fire that can quickly get out of control and ultimately ruin your finances.
If your debts are becoming unmanageable, this post is for you. James L. Gutting, a renowned bankruptcy lawyer in Owosso shares expert tips on how to overcome debt and get your finances back in the green.
1. Stop borrowing money
As the popular adage says “If you find yourself in a hole, the first thing to do is stop digging.” Debt is a massive hole and the more you borrow, the deeper it goes. This means no more swiping your credit cards, no more taking on more debt, no more applying for new loans. Instead, make the decision to live on a cash basis until it becomes a habit. This will reshape your attitude towards debt and help you become more responsible with your money.
2. Track your spending
Overcoming debt means reducing your expenses. You need to figure out where your money is going so you know what costs you can afford to cut. There are a number of ways to track your spending — recording expenses on an excel sheet, keeping notes in a notebook, using a money management app, and more. Whatever method you choose, the important thing is that you stay consistent with your tracking. Lastly, remember to include your debt payment obligations when tracking your spending.
3. Increase your income
Cost-cutting measures will only take you so far. There’s a limit to how many expenses you can cut, even if you are the most frugal person on the planet. Plus, you still need to have some extra money to pay off the amounts you owe. So the next logical step is to find a way to bring in more revenue. The more extra cash you can generate, the quicker you’ll be able to get out of debt. There are many ways to increase your income, but keep in mind that they will all require focus and dedication. There’s no easy way to make money, after all.
4. Prioritize your debt
Start by identifying your most critical debts — the ones that cause the most damage to your finances. These are the debts that you want to settle first. Consider factors like interest rates, collateral, and repayment periods so you have a clear picture of where to begin.
5. Negotiate better debt repayment terms
If you can get those critical debts out of the way, you may be in a better position to negotiate better terms with the remaining creditors. You could request an extended payment plan, adjusted interest rates, and lower minimum payments. This is a common tactic for getting out of business debt because believe it or not, creditors don't want to see your business go under. If the business fails, the creditors get nothing. So they’re often willing to negotiate better repayment terms provided you’re dealing in good faith.
If all else fails, consider filing for bankruptcy
People consider bankruptcy to be a negative development. But if you’ve been struggling with overwhelming debt, filing for bankruptcy can mean a breath of fresh air and the chance to rebuild your finances, albeit from scratch.
The key is to work with a reliable bankruptcy lawyer that understands the circumstances of your case and helps ensure a smooth filing process.
Book your appointment today!
If you need a bankruptcy lawyer in Owosso, Shiawassee County, or any of the nearby Michigan communities, our team at James L. Gutting, Attorney-at-Law can help. Let us work with you to turn your financial situation around. Book an appointment today by calling 989-743-1188 or 810-230-1517. You can also get in touch with us by filling out our contact form.