Filing bankruptcy is an effective strategy for discharging an overwhelming amount of debt. However, in some cases, the costs can outweigh the benefits. If you accrued hundreds of thousands of dollars in medical debt, bankruptcy might be the best option for your financial footing. If, on the other hand, you have a few thousand dollars in credit card debt, buckling down and paying it off within a few years could be less stressful than filing bankruptcy, which would remain on your credit report for much longer.

Thinking About Filing Bankruptcy? 3 Tips for Paying Off Credit Card Debt so You Don’t Have To

1. Talk to Your Lenders Directly

If you miss a credit card payment, you will likely receive a notice from the institution detailing the failure to pay and any applicable late fees. This notice may seem intimidating, but upon calling the lender and talking to someone directly, you may be surprised at how willing they are to work out a deal. Essentially, lenders just want the money they are owed, and they are often willing to negotiate for either a more manageable payment plan or a smaller total balance.

2. Consolidate Any High-Interest Debt

Credit card debt is especially challenging to pay down because it has an incredibly high interest rate. Fortunately, you may be able to consolidate high-interest credit card debt into a personal loan that has a single, more manageable monthly payment. Personal loans tend to have fairly high interest rates, but you will be able to pay off debt much faster with a 15% interest rate as opposed to a 25% rate. 

3. Eliminate Unnecessary Expenses

If you tracked every penny spent, you’d probably find at least a few areas where you are a tad frivolous. Small expenses here and there can add up to a considerable amount of money every month, and if you put this money toward debt instead of needless expenditures, you can get ahead financially. Consider ditching the gourmet coffee habit and subscription entertainment services until you tackle a sizable chunk of your credit card debt.

If you have accumulated so much debt that even the above tips would not pay it off in a reasonable amount of time, turn to Brian Kawamoto Attorney. Based in Aiea, HI, this bankruptcy lawyer has extensive experience helping clients navigate many financial issues, from complicated IRS tax audits to estate planning disputes. Visit his website to learn more about discharging debt, or call (808) 486-6107 to discuss filing bankruptcy today.