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Tips for getting rid of debt this year

According to the National Retail Federation, Americans planned on spending an average of more than $900 during the winter holidays. Regardless of how much Florida residents spent on their Christmas shopping, NerdWallet advises adding credit card debt as a major category in their budgets. This may increase the odds that the debt gets paid off in a timely fashion. Debtors may want to use the snowball method, under which the card with the lowest balance gets paid off first.

Once that balance is paid off, the card with the next lowest balance gets paid off. This process continues until all credit cards have been paid off. Those who have credit card debt are urged to look at their 2016 statements to see if any of their purchases may be eligible for a tax deduction.

It may be possible to ask a credit card issuer for better terms on one or more cards. In many cases, the oldest card an individual has is the one with the lowest credit limit and highest interest rate. In some cases, it may be possible to have the interest rate lowered, the credit limit increased or have the card converted to one with better perks. Keeping old accounts is beneficial because credit age accounts for 15 percent of a person’s credit score.

Those who are struggling to pay their debt may want to think about filing for bankruptcy. Chapter 13 bankruptcy may allow a debtor to reorganize his or her debt and repay it over three or five years. It may also allow a debtor to strip junior liens and put a temporary stop to a foreclosure or a repossession. An lawyer may be able to explain in greater detail the process of filing and additional benefits of doing so.

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