Most New Jersey residents will acquire multiple types of debt during their lifetimes. It isn’t uncommon for a person to have student loan, credit card and auto loan balances at the same time. Furthermore, many people will have a mortgage or rent payment in addition to those other balances. Credit card debt might be the hardest to pay down as it can carry an interest rate of more than 20%.
Making debt payments each month can make it more difficult to save for retirement. However, there are steps that individuals can take to help themselves get out of debt and secure their financial futures. For instance, it’s possible to seek out a debt consolidation loan. This type of loan may allow a debtor to reduce the interest rate that they pay on outstanding loan balances.
The snowball method can make it easier to pay down debt balances in less time. Using this method, an individual focuses on paying down the smallest debt balance first. Once that has been paid off, a debtor will then apply that monthly payment toward the lowest remaining balance. The process continues until all debts have been repaid in full. Debt stacking may be an effective alternative for those who have a greater understanding of their finances.
Those looking for a way to get out of debt in a matter of weeks or months may be interested in filing for Chapter 7 bankruptcy. Doing so could lead to full discharges of credit card, health care and other unsecured debt balances. In some cases, debtors will be able to have their debt balances discharged without losing any property or making any payments to their creditors. An attorney could help a client through the bankruptcy process.