If you have credit card debt, it’s important to immediately take steps toward paying it off. Researching your options is the first step to take. Then, you choose what strategy works for your situation. Michigan allows creditors up to six years to collect debts, including obtaining a judgment on the debt. It’s possible for a creditor to renew judgments indefinitely, so ignoring a debt isn’t going to make it go away.
You could begin paying off your debts with the smallest first. Don’t pay attention to the interest rates on your debts when you categorize them from smallest to largest. Some people find it less overwhelming and more motivating to start with the smallest debt. You can pay it off faster than the larger debts. While using this method, it’s best to continue paying the minimum monthly on all of your debts. With any remaining money that you could dedicate toward paying off your debts, you should put it into paying off the smallest.
The debt avalanche method is the opposite of debt snowball. You would pay off your debts in order of the most expensive first. This method of paying off credit card debt is the fastest and least expensive overall. However, it’s the most trying on your emotions because it will take longer to clear away the first debt. Whether you opt for a debt snowball or debt avalanche depends on your personality and which strategy that you know you could stick to.
If your unsecured debts would take more than five years to pay off, you could look into debt relief options. You might be able to negotiate a lower overall amount to pay off, a lower interest rate or a reduced monthly payment. Bankruptcy is another form of debt relief that you may consider. If your total unsecured debt is half or more than your gross income, and you seem to have no chance of paying it off even after five years, then bankruptcy might be the option for you.
No matter how much debt you may have, it’s possible to free yourself from it. Debt snowball, debt avalanche and debt relief are three of the main strategies for paying off credit card debt. You could combine debt relief with either snowball or avalanche. Creditors are sometimes willing to negotiate better terms if you have a lot of debt that you owe them.