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7 Ways Millennials Can Deal with Debt
If you’re a millennial dealing with debt, you are definitely not alone.
The average millennial has some type of debt that prevents them from saving for the future. If you’re in debt, there’s a good chance you’re delaying many important life milestones like getting married or buying a house because you simply can’t afford them.
The good news for millennials is there are strategies for dealing with debt to improve your financial situation and set yourself up for success.
If you’re buried with debt and looking for relief, reach out to an experienced Ohio debt relief lawyer at Luftman, Heck and Associates. We can provide you with some recommendations, protect you from unfair debt collection practices, and ensure your consumer rights are respected.
With considerable experience providing student loan relief and other debt solutions, call us at (888) 726-3181 to set up a free consultation.
Tips for Millennials to Get Out of Debt
These strategies can help put an end to your debt sooner and start focusing on your long-term financial goals.
Understand What You Owe
Gather all of your statements and bills. Then, calculate the total amount of debt you owe. It can be difficult to pay off debt when you’re unaware of exactly how much you have.
There are a few websites that can help. AnnualCreditReport.com lets you check your credit reports and lists all your debts. This can help you discover an item or two that you forgot about.
Choose a Debt Payoff Strategy
There are two main debt payoff strategies: the debt avalanche and debt snowball. A debt avalanche prioritizes your debts with the highest interest rates. This lets you save the most on interest over time. If you have a lot of high-interest credit card or student loan debt, this may be the way to go.
However, if you have trouble staying motivated, the debt snowball strategy may make more sense. The debt snowball strategy lets you pay off smallest debts first. Then, you can apply the payments you were using toward the next item. Essentially, you’re building momentum or “snowballing” your payments as you pay off each debt.
Consider a Debt Consolidation Loan
If you’re having a tough time managing your debt, a debt consolidation loan may be a good option. This involves taking out a new fixed-rate loan and using the money to pay off your debt in installments over a set term.
The main benefit of a debt consolidation loan is that you can bundle your debts into one manageable monthly payment at a lower interest rate. A lawyer can help you determine whether a debt consolidation loan is a good choice for your unique situation.
Decide Whether to Receive Credit Counseling
While credit counseling won’t reduce the amount you owe, it can give you the chance to work with a credit counselor who can design an affordable monthly payment plan. You may be able to secure lower interest-rates with your creditors and stop creditor activity.
Credit counseling can also organize your debt payoff process and make it easier to manage. Speak to a lawyer before going with credit counseling as Ohio has strict laws regulating credit counseling companies that you must be aware of.
Think About Debt Settlement
Debt settlement involves negotiating with your creditors to settle for less than the outstanding balance. If you enroll in a debt settlement program, you’ll make a monthly deposit into a special account.
As your account balance increases, the debt settlement company will reach out to your creditors to negotiate lower settlements. It’s a good idea to work with a lawyer who can make sure you are working with a reputable debt settlement company that treats you fairly.
Find Out If You’re Eligible for Student Loan Forgiveness
Do you have federal student loans in your name? If so, you may qualify for student loan forgiveness. A lawyer can evaluate your situation and determine whether you are eligible for forgiveness under the borrower defense to repayment program because you were a victim of fraud. If so, they can guide you through the process of getting your student loans forgiven.
Understand that Bankruptcy is the Last Resort
If you’re over your head with debt, bankruptcy may be an option. In Chapter 7 bankruptcy, most of your possessions are sold that so that your debts can be repaid. If you have sufficient income and are not eligible for Chapter 7, Chapter 13 may be right for you. This type of bankruptcy can give you the chance to make one, consolidated payment toward for three to five years. Since either bankruptcy option is a legal process that can take a serious toll on your credit, it’s important to work with an Ohio bankruptcy lawyer before moving forward.
Contact Luftman, Heck and Associates
If you are a millennial struggling with debt, Luftman, Heck and Associates is an invaluable resource. Call us at (888) 726-3181 today to learn about your options and take control of your current financial situation.