Learn How to Get Out of Debt

Take a deep breath…you can get through this

No matter how bad things may seem, there are things you can do that may go a long way to helping you get back on track financially. Be realistic about where you are now. Do you have too much debt? If you can answer “yes” to these questions, you probably do:

• Are you unable to pay your monthly bills?
• Can you barely make the minimum payments?
• Are collection agencies calling you on an almost daily basis…or worse?
• Do you have to borrow money from friends, family, or payday loan companies just to buy food, gas, and keep your electricity from being shut off?
• Is your credit score continually heading south?

It is time to make a plan

Creating a budget is a time-honored way to keep spending under control. Take a look at your income and your expenses. Use a basic budget worksheet (you can search online for a free downloadable worksheet, or purchase a budget book from your local office supply store). It will allow you to track how much you earn and categorize how much you spend. You will be able to identify both fixed expenses (those that are consistently the same from month-to-month, such as car loans and rent) and variable expenses (such as clothing, gas and food costs). Once you start to master the budget process, you will be better able to calculate your projected cash flow and avoid going into debt — or getting deeper into debt. Just remember to:

• Make the time to monitor your finances — for some, a daily routine works best, others are more comfortable setting aside a Sunday afternoon.
• Keep accurate records — whether you use folders or an online system, record-keeping is critical to staying on track
• Set reasonable goals — it is great to be enthusiastic, but unreasonable goals often lead to failure

Develop healthy habits. Cutting down on expenses and getting rid of unnecessary debt and expenses is like going on a diet. Trim the fat on your entertainment budget. Keep car payments in the low-calorie range. Don’t bite off more of a mortgage payment than you can chew. Even small cuts add up and make a big difference in how much money you have left at the end of the month.

Consider getting professional help

By all means, you should take charge of your own finances by using the steps outlined above. Depending on your individual situation, you may also benefit from the counsel of an attorney who has experience in helping people find the best legal answer to their debt problems. They are familiar with solutions available to people in Philadelphia and surrounding areas, including Camden, Gloucester and Burlington counties in New Jersey. They know the law and may have insights and information about programs you may not have known exist, for instance:

• The Perkins Loan Forgiveness program, designed for full-time nurses, teachers, firefighters, law enforcement officers and others who perform their duties in low-income or underserved areas, may allow Philadelphia debt forgiveness of student loans.
• The Mortgage Relief Act, which is in effect only until the end of 2012, may afford you the advantage of eliminating taxes on forgiven mortgage deficiencies.
• If you are ineligible for Chapter 7 and have too much debt to be able to file for Chapter 13 bankruptcy, you may be able to file personal bankruptcy under Chapter 11.

Contact a Philadelphia attorney for more information on how to get out of debt

Whether you are considering debt relief, debt reorganization or debt counseling, Philadelphia attorneys can explain your rights, your legal recourse and your options. To find a lawyer in your area, please fill out the online form or call 267-428-1386.