Falling into debt is a common problem. First, simply making ends meet every month can be a challenge. But often people find themselves with steep debts caused by medical expenses, a divorce or the loss of a job. And eventually, these debts can have a devastating effect on both your long-term financial prospects and your emotional well-being.
As such, it's important to find ways to deal with your debts and limit the damage they are doing to your life. And the first step you can take toward digging yourself out of a financial hole is developing a payment strategy.
To this end, it is a good idea to give priority to making payments on your necessities. For most people, shelter and transportation are critical. Therefore, if you are a homeowner, you want to make sure to keep up with your mortgage payments. And if you have a note on your car, you want to stay on top of those payments as well.
After your necessities, you must address those debts that you are legally obligated to pay. If you have child support payments, you do not want to fall behind on those. Likewise, you also need to pay your taxes. If you leave these debts unpaid, you could face severe financial penalties or even be arrested and jailed.
But what happens if you take care of your necessities and legal obligations and you are still facing a mountain of credit card, student loan and other debts? Well, in such a case, you may want to look into the advantages of filing for a Chapter 7 or Chapter 13 bankruptcy.
Many people have been able to get a fresh financial start by filing for bankruptcy. A Louisiana bankruptcy attorney can advise you on the most effective method of seeking debt relief and help you develop a financial plan for the future.