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A closer look at debt relief options

Florida residents and Americans in general have reverted back to spending habits last seen prior to the Great Recession. Credit card debt in particular may be worth tracking carefully as interest rates on credit cards are usually higher than on other debts. Carrying balances on those cards could make it harder to save for retirement or meet other long-term goals. The best way to start getting out of debt is to acknowledge it exists.

Ideally, an individual will make a list of balances owed as well as the interest rates on them. It is then worthwhile to see if there is room in the budget to make more than the minimum payment. For those who can pay more than the minimum and have total credit card debt payments that are less than 15 percent of their income, the debt snowball or avalanche methods may work best.

However, those who devote more than 50 percent of their income toward credit card debt may be best served by filing for bankruptcy. The fact that a person filed for bankruptcy will remain on a credit report for seven or 10 years, depending upon the chapter. In most cases, it is possible to increase a credit score as much as 80 points within six months of filing. Debt consolidation or debt settlement may be options for those with large balances who don't want to file for bankruptcy.

Those who are seeking debt relief may benefit from filing for bankruptcy. It may be possible to have debts discharged immediately or restructured over a period of up to five years. After filing, debtors may be entitled to a stay of creditor collection activities. An attorney may explain other benefits of filing for bankruptcy such as the possibility of keeping property such as homes or cars.

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