- Posted April 4, 2022
How to Free Yourself from the Burden of Debt - Certified Financial Planning Advice
Not all debt is bad debt. When you can leverage debt to create businesses, purchase cash flowing assets, and otherwise use your money the smartest way possible, debt can be a gateway to wealth. But other forms of debt, like credit card and consumer debt or student loan debt can easily add up and keep you trapped in a place of financial insecurity. If you are struggling with debt, it can feel like there is no way out of the trap, but don’t lose hope. Our certified financial planner advises a few ways that you can free yourself from the burden of debt and achieve financial stability.
Create a Repayment Plan
The first thing that you need to do to free yourself from the burden of debt is to create a repayment plan for all your debt. Our certified financial planner states that a repayment plan is a type of plan you can work out with your lenders that adds a portion of your past-due amounts to your future bills for a period of time to help you catch up. This is a great option if you got into debt when in a worse financial position, and now find yourself recovering and able to take on higher monthly payments.
Look into Discharging Your Debt
Another option from our certified financial planner's toolkit is that you should check out to free yourself from debt is whether you are eligible to discharge your debts. When you discharge a debt, you declare bankruptcy, and if deemed eligible, your debtors can no longer attempt to collect your debts and you are no longer responsible for them. Bankruptcy is usually a last resort for your debt troubles. It is also worth noting that not all consumer debts can be discharged, but rather may be restructured. It is mostly business debts and other forms of debt that can be discharged via bankruptcy court.
Pay Your Smallest Debts First
The final certified financial planner's tip that will help you free yourself from the burden of debt is to pay off your smallest debts first. This is part of a strategy of snowballing your debt repayments. By paying the smallest debt first, you are able to build momentum by paying off the easiest debts first, and as these get off your plate the larger debts become easier to manage and pay off.
Debt can be a serious shackle to your progress in the world since your financial stability is an essential aspect of your life. But there are plenty of ways out of debt that anyone can take. Consider these three options to find the best way to free yourself from debt.
Check out this article on how to navigate credit troubles while financial planning!
Contact Tenpath Financial Group for certified financial planning services.