It’s time to face the facts. You’re in debt, and that is okay.
First and foremost, there is no shame in the situation you are in. Being in debt in Los Angeles is a lot more common than one might think, especially given the current instability of financial institutions these days. You are not alone.
The second thing to do is take stock of your situation and begin to formulate a plan to manage your debt. There are many options for debt relief in Los Angeles, apart from working with bankruptcy lawyers and credit counseling agencies, and with the right plan, you might just be able to pay your debt, fast.
Here are 5 Things You Need to Do to Get Out of Debt Fast in Los Angeles:
1. You have to know how much you owe.
It might be a good idea to list down all of your debts so you know exactly how much you need to pay off. Make sure to include the creditor to whom it is due, the total amount of debt, the monthly payment and interest rate, and when the debt is due.
You can refer to your credit report to confirm what debts you might be working with. Listing them all down is a good first step to tackling all your debt, as it keeps you aware and accountable.
Tip: Once you have a complete picture of your debt and your income, you can figure out how to calculate your Debt to Income Ratio (DTI). It’s a good way to keep track of how much of your income is going toward paying off your debts fast.
Just divide your debt payments by your income, and multiply by 100:
Ex. $1000 of monthly debt divided by $2000 of monthly income is 0.5 x 100 = 50%.
The lower the number, the better. Having your DTI is also a good way to figure out the best ways to manage your income in the context of your debt.
Make sure to refer to the list as often as you need, especially when it comes to paying your bills. Be sure to regularly update your list as your debt total changes.
2. You have to make sure to pay our bills on time each month.
It might sound too easy, but another way to achieve debt relief is to pay your bills on time each month. When dealing with debt, it’s hard to not to feel overwhelmed by both your monthly debt payments and monthly bills. But late payments make it harder to pay off your debts fast. In Los Angeles, missing two or more payments in a row can lead to increased interest rates and charges.
Having a handle on your monthly bills is a good start to having a handle on your debt. Try working with a monthly bill payment calendar, or making at least minimum payments.
3. You must decide: which of your debts do you pay off first?
One way to get out of debt fast is to break your debt down into increments you can focus on. Decide which of your debts you need to pay off first, and tackle your debt bit by bit.
You might want to consider working on your credit card debt first with your Los Angeles bank. This is often the best strategy, as credit card debts tend to have higher interest rates compared to other debts. Focus on paying off the credit card with the highest interest rate as it tends to cost the most.
Refer to your debt list when prioritizing which ones to pay off first. It might be a good idea to rank them in a certain order and work from there. Instead of tackling the biggest debt, you can work to knock off smaller ones first, to build your confidence.
4. Consider building an emergency fund for back-up.
Since you’re primarily using your income to cover your debt, it might be hard to take some aside from your savings. But if you can spare any amount, having a small emergency fund on-hand is better than accumulating more debt when an unexpected crisis comes up.
Work toward a small goal for your emergency fund, maybe $500 – $1000 dollars is a good place to start. From there, build up to what you can. A good idea is to have a reserve of at least three to six months of your living expenses.
5. Learn to acknowledge that you might need help.
If you feel overwhelmed trying to get a handle on your debt and your bills, you might want to consider external assistance, or even steps outside of paying off your debt.
One thing you might want to consider is filing for bankruptcy. It’s a great option for a fresh start if you’ve been drowning in debt. For many, bankruptcy is the right move when figuring out how to get out of debt. Despite the stigma of bankruptcy, there’s no shame in making the best possible choice available to you.
Consider working with a bankruptcy lawyer in Los Angeles who can give you the best advice and counseling you need to make the best of your situation. It’s time to make the choice to work toward your debt relief today.
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