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How to regain your financial health

Virtually all Americans live with debt to their names. Sometimes it’s looming medical bills, other times it’s personal loans. Often times, though, people live with the stress of credit card bills. The numbers can vary, but the average American household lives with $5,000 - $10,000 worth of credit card debt.

It can be hard to see the light at the end of the tunnel, but it is possible to push through. These are a few of the most effective ways you can get back on your feet, get your accounts back into the black and move forward to your next chapter.

Speak with a professional

One of the main reasons people live in a mire of debt is because they don’t know what options are available to them. Consulting with a professional is one of the best first steps you can take to getting your life back on track. These services are often more affordable than people realize. A professional will look at the specifics of your situation and help you devise the best strategy possible to get you out of debt.

Negotiate with creditors

Depending on the nature of the debt, people can often negotiate with their creditors. These conversations are usually intense and can be a real challenge for someone without prior experience.

An experienced attorney, however, can usually convince an unsecured creditor to settle for 70-, 50- or even 30 percent of the original total. That could mean only being on the hook for $3,000 of a $10,000 credit card balance.

Create a financial plan

Most people do not enjoy sitting down and planning things, but it is one of the best ways to increase your financial health. Making a realistic budget and sticking to it will give you accountability for overspending. It will also give you a plan for how much surplus you could have each month.

Something many people do not realize is that one form of bankruptcy, Chapter 13 bankruptcy, can actually be looked at as a form of a financial plan. When you have a steady income as well as a lot of debt, this financial tool will reorganize your bills into one sum which you will be able to pay off over the course of a few years; all without interest or penalties.

Consider a fresh start

If your debts are massive and you simply do not have the income to stand up to them, the best choice may be to seek out a fresh start – Chapter 7 bankruptcy may be the saving grace you are looking for. Many of your assets will be liquidated to pay your creditors, but there are several exemptions, possibly including your home, your vehicle and other important items.

Living in debt is harrowing, but it is not insurmountable. With a little help and some specialized planning, you too can dig yourself out. There are so many avenues that can lead to a debt free future, you just need to choose one and follow it.

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