The holiday season is behind you, but you might still have to take care of one aspect of the season – credit card bills. This can be a challenging situation, and it might even be overwhelming. Determining how to pay these off requires a plan, so you need to try to get things together now.
One of your first steps is to find out how much you actually owe. This is where many people get frightened or upset. Some don’t think that the totals would have added up so quickly. While you are writing out your totals, make note of the minimum payments on each credit card. This will help you come up with a plan.
Set up a budget
Once you know your minimum payments for each credit card, you can set up a budget. Include an accurate income and list your basic bills, including groceries, first. You have to ensure you can pay for your rent or mortgage and utility payments before you worry about taking care of the credit card bills.
After you get all the numbers down, determine whether you can start to pay more than the minimums on everything. If you pay only the minimum, you are going to remain in debt longer and will end up paying a lot in interest while you continue to only pay what you’re required to pay.
Taking a look at these numbers can invoke fear. There might not be much money left after the basic bills and credit card payments, but some people might find that there isn’t even enough to make the minimum payments on everything. In this case, a more drastic solution might be necessary.
Plan beyond the budget
You might realize that you can’t possibly pay the minimum payments on the credit cards and keep up with your other bills. This stark realization might lead you to look for other options, such as filing for bankruptcy. If you know that you need to file for either Chapter 7 or Chapter 13 to regain control of your finances, find out the terms for each so you know which one will serve your needs.
Remember, bankruptcy is a tool you can use to regain control of your finances. This is a responsible option for many people. Learn your rights and responsibilities if you are going to use bankruptcy to get a handle on your debts and a fresh financial start.
