Debt Free in 2015 – Now is the Time to Prepare

We are a month away from the new year, but now is the time to start putting together your game plan to get out of debt in 2015.  Debt is often accumulated over several years (and sometimes decades) and it will take some careful planning and affirmative steps on your part to get a handle on it and start making some true progress of getting out of this hole.

Here are three steps you need to take to become debt free in 2015:

#1 – Get a True Understanding of How Much Debt You Have

When things get really miserable you don’t even want to acknowledge it.  Many families I meet with battle their debt problems for years and simply get tired.  They lose track of how much they owe and to what junk debt buyer is now claiming to own the debt.

I understand this.

However, if we are going to deal with the debt beast once and for all we need to get some real numbers.  The best place to start is on your credit report.  You can get a free copy of your credit report once per year at Annualcreditreport.com .  It costs extra to get your credit score, but don’t worry about what your score is.  If you are dealing with serious debt the credit score is the least of your worries at this point.

Once you have your credit report it is a good idea to set up a time to meet with a consumer attorney.  If you can find one that does bankruptcy as well, all the better (full disclosure – I am a consumer attorney who does bankruptcy).  Many attorneys will meet with you for free and let you know if bankruptcy is a good option or if there are other debt settlement options that would be just as effective.

#2 – Is Settlement a Real Option?

Next, you need to take a hard look at your income and savings (if any) and determine if settlement is actually an option.  I get that no one wants to file for bankruptcy and many people avoid it even to their detriment, but if you keep throwing money at the hope of settling your debts when that simply isn’t reality you will never get out of your current situation.  Never.

This is where decisions have to made – often hard decisions, that will result in actual change.

If you have the ability to settle your debts your attorney can help you put together a settlement budget and discuss what is involved in contacting your creditors and submitting an offer to settle the debt.

#3 – Putting Your Plan into Action

Whether it is bankruptcy or debt settlement it is going to take some planning.  An consumer attorney is going to provide you with valuable help in putting together a realistic plan and then assisting you in putting it into action.  Often there are issues that need to be addressed and some actions that must be avoided, particularly when it comes to bankruptcy, before any concrete steps are taken.  For example, did you know that if you have transferred assets to a family member or friend that you may not be able to file for bankruptcy?  Or if you recently bought a new car it is going to be necessary to wait at least 30 days prior to filing your case?  There are many details you need to be aware of as you decide which direction you will head and the least painful way to get there.