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What next?
Here's where the real work starts.
Normally
once you know were you are at you are scared and shocked! You know what I mean. Is the amount more than you make in a
year? Is it a lot more than you ever imagined? Regardless, now is the time to really consider all options.
Should you meet with a bankrupcy Attorney?
Maybe, they can definitely advise you if you are eligible for BK protection.
Remember that they are in business to make money, and if you decide to file BK they will make money. They are not personal
credit experts and they are not concerned about your financial life after the BK. They do the job you hire them to do,
file your BK. Even if you are eligible consider your future and how you will feel after filing. Can you realistically make
enough and trust yourself to stop spending enough to pay off your obligations? I can't tell you the answer that's
best for you. Time to take responsibility and lay it all out there and trust yourself. If you think you can pay it off without
a BK and can make out a reasonable plan to do it, than do it. If BK is for you, so be it. My budget will help regardless as
you'll need to have these budget skills for after your BK.
Next, take a look at your budget and debt load.
1.Do a new Debt Summary Sheet.
This time fill it out from the top with the highest interest rate down to the lowest. Do not include your car loan,
student loans or mortgage. This will also help your credit report.
There are two variations to note-
#1 if you are past due put those on top of the list until they are caught up. After they are current put them in the correct
spot based on interest rate.
#2 if your car loan interest rate is higher than all your other debt put that on top. My
goal for you is to become debt free, and have the best credit score you can. This will help you get better rates on your loans
and help you get out of debt sooner. If you are going to be paying towards past due debts make sure you have enough money
to keep the other debts current. No point putting money towards something that is already late (and already hurting your credit)
while letting other debts go past due and then having even more dings on your credit report.
2. Let the Debt Summary
Sheet be your road map to debt free living. Your goal is to pay off the top ranked debt (the one on top of your sheet) and
keep working your way down till there is nothing left. Use every extra penny you can get and apply it to the top debt. You
must also pay the minimum due on your other bills.
Expect to redo your Debt Summary Sheet every month
Change on the
Debt Summary Sheet should be a good thing. It means you are cutting your debt down and that you are closer to your
debt free goal.
During this period pay cash for everything.
Your other option
is using a rewards credit card, like one that pays you a % back on all your purchases. YOU MUST PAY OFF THIS CREDIT CARD EVERY
MONTH ON TIME!!!
*If you
are not sure you can trust yourself to pay it off every month than only use cash.
Time to plan how you
will get out of debt and organize your finances.
My favorite saying is that I'll laugh all the way to the bank! Meaning that if
someone jokes about my coupon use or about asking for a discount, it rolls right off my back because I'll be
taking all that money I'm saving and deposit it in my account, while I'M LAUGHING ALL THE WAY TO THE BANK!
This is the attitude you need to have in order to get ahead in the world! It's
not about being cheap, just anout being smart with your money.
*Important Note* Call all your creditors
and ask for a reduction on your interest rate. Do not be discouraged if you get turned down. Some creditors will lower the
rate and others will not. Even if one lowers their rate you are ahead. Every penny saved helps pay down your debt and will
help you reach your financial goals.
Continue to Step Four
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