41.2% of all households in America carry some sort of credit card debt, with the average credit card debt in Missouri being $6,491 per household. That’s not including the mortgage, student loan and other types of debts that families seem to so easily accrue in today’s difficult market.
Despite booming real estate markets and even lowered debt rates in St. Louis and throughout the entire state, there are still situations in which debt can’t be avoided. When it gets too large to manage, there might seem like no way out, but there are actually many ways to get through it and bounce back with an even better credit score than before. Here’s how.
Why Bankruptcy Might Not Be a Bad Idea
In 2017 alone, there were 765,863 non-business bankruptcy filings, according to the Administrative Office of the U.S Courts. If you are simply unable to make payments and have exhausted all of your other options, filing bankruptcy might be the option for you. It will not only relieve you of certain debt, the court will usually assign you a budget so you can repay your remaining debt, preventing disastrous events such as foreclosures, repossessions and wage garnishments.
Focus on Getting Local Legal Advice
If you believe this to be the best route for you, it is best to consult a local law firm that specializes in finance and bankruptcy. A group offering bankruptcy help in Scottsdale, for example, will be offering different advice than one in different states and even in St. Louis. While the law doesn’t vary from state to state, the median income amounts you need to meet in order to qualify do as well as the various exemptions you may qualify for. If you are considering filing for bankruptcy, it is best to speak with a qualified lawyer who can help you make sense of the state and federal exemptions available to you in Missouri.
How to Bounce Back After Bankruptcy
Because filing bankruptcy does affect your credit score, it will be important to work towards building your credit slowly in the years that follow. Try not to apply for new lines of credit too soon as these requests and potential denials will continue to hurt your score. It is best to formulate a budget in order to efficiently pay all of your bills on time and avoid taking on any new credit. It is easiest to plan out this budget by first assessing what you have to pay off or how much you want to save. Then, with this number in mind, you can determine how much you need to be saving each month in order to achieve this. Once you know how much you need to save, you can move things around or take on extra responsibilities to make this happen.
Financial Freedom is in Sight
Try to take this process one step at a time. If you have to file for bankruptcy, you shouldn’t feel ashamed, as hundreds of thousands of people all over the country do so each year in order to relieve themselves of mountainous debt that got a little out of hand. What is important is that you are prepared to rebuild your financial health afterwards. As you increase your savings, you’ll be able to pay back any owed debt to decrease your debt-to-income ratio, improve your credit score, and eventually get back to living a stress-free, financially healthy life.