Thomas F. Miles, Attorney and Counselor at Law
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Strategies for paying down unmanageable debt

A great number of California residents face mounting levels of consumer debt. This can lead to high levels of stress, as well as an inability to set aside money for retirement, savings or emergency needs. One way to address this issue is to design and implement a strict repayment program, which can give individuals a measure of control over unmanageable debt.

One way to address high levels of credit card debt is known as laddering. This approach requires that consumers list their debts according to the interest rate attached to the account, and begin by paying down the account with the highest interest rate first. Lesser amounts can be paid toward the other accounts, but the bulk of one’s available funding should go toward paying off the high interest accounts first.

In theory, laddering allows consumers to lower the overall volume of interest charges that they would face over the course of their repayment period. In addition, there may be a psychological boon that comes with knocking out the worst accounts first. This could lead to a snowballing effect, and make it easier to stick with a stringent debt repayment program.

In some cases, California residents are simply unable to repay their current level of debt, regardless of how aggressively they pursue these and similar options. When an individual’s income does not allow for covering both debt service and the basic costs of living, another path must be chosen. For many, that path is personal bankruptcy, which can lead to not only the elimination of many forms of unmanageable debt, but also the chance to gain a fresh financial start.

Source: The Atlanta Journal-Constitution, "Tips on paying off credit card debt", Clark Howard, May 14, 2014

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