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Practical Ways of Getting Out of Debt

The St. Louis bankruptcy attorneys at Castle Law Office provide legal assistance for those who are going through severe financial difficulties. Filing for bankruptcy is a way to move past crippling debt and to get on with your life. If you or a loved one in the St. Louis, Missouri and Illinois area are considering filing for bankruptcy, contact Castle Law Office for a free legal consultation today. We can offer help to citizens in St. Louis County, Jefferson County, St. Charles, East St. Louis, Franklin County, Boon County, and the entire state of Missouri, as well as Belleville, Granite City, Fairview heights, O'Fallon and Alton.

Practical Ways to Get Rid of Your Debt

Believe it or not, ignoring the many phone calls and notices in the mail won’t make the problem go away. Debt is still out there, and it will always be there until you make the decision to resolve it in one way or another. But remember that no matter how much money you owe, there is always a way to get past it and move on. Here are some practical suggestions.

Pay more than the minimum: The minimum payment is essentially designed to keep you in debt for all of eternity. The majority of that minimum payment goes to the interest payments and barely touches the principal. Try to always double the minimum payment (if the minimum is $250, try to pay $500.) It probably seems like you can just barely afford the minimum payment, but if you take a good, hard look at your monthly expenses, you can probably find the money somewhere.

Liquidate your savings: This seems like a bad idea, but it’s really just a matter of mathematics. If you are being charged 18% on a monthly basis (plus all the random and maddening charges that they can throw at you whenever they want,) it seems pointless to keep a savings account that is only paying you what amounts to a fraction of a percent every month. Cashing out your savings and putting it towards your debt makes financial sense.

Borrow against your life insurance: If you have a life insurance policy with a cash value, you can borrow against what you have in your policy. The rates for the loan are generally a lot lower than that of a credit card, plus the repayment terms are much more favorable. If it seems irresponsible to borrow against your life insurance, you should consider that it is much more irresponsible to leave your loved ones with mountains of unpaid debt.

Borrow from your 401K: Most 401(k) plans have a feature that lets you borrow up to 50% of the account's value, or $50,000, whichever is smaller. Interest rates are usually a point or two above prime, which makes them cheaper than that found on credit cards. There are some tax issues that you should be aware of, but generally speaking, any rate is easier to pay back than a credit card.

Renegotiate: Believe it or not, many creditors are more than willing to re-negotiate the terms and rates of your debt, especially if you prove that you have done all that you can to pay what you can on time and in good faith. In cases like these, having an attorney to negotiate for you can go a long way.

Declare bankruptcy: This is a last resort, but it is sometimes a necessary one. No one wants to avoid paying what they owe, but sometimes repayment turns out to be impossible. In this case, filing for bankruptcy can be the only way to get past the debts and move on with your life. Since the rules regarding bankruptcy filings have become much stricter in recent years, having a qualified bankruptcy attorney to help you through the process is crucial. With the assistance of a bankruptcy attorney, you may find yourself with much more favorable terms, and you may be able to move on with your life that much quicker.

In the St. Louis area, Castle Law Office offers experienced and practical legal counsel for those who are going through crippling financial problems. We can offer help to citizens in St. Louis, Jefferson County, St. Charles, East St. Louis, Franklin County, Boon County, and the entire state of Missouri. If you or a loved one is considering filing for bankruptcy, contact our offices for a free legal consultation today.

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