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How to Create a Sound Debt Repayment Plan

How to Create a Sound Debt Repayment Plan

When you file for Chapter 13 bankruptcy in Ohio, you will still be required to pay off certain debts. The best way to accomplish this is to create a realistic debt repayment plan with the help of an experienced bankruptcy attorney that allows you to fulfill your obligations over an extended period of time.

The following steps will help you establish a debt repayment plan that can get your finances back on track:

  • Figure out all sources of debt: Before you can begin paying off your debts, you need to be sure which debts you still owe. Make a list of all your debts, including their minimum payment amounts, interest rates and unpaid balances. This could include car loans, student loans, mortgages, credit cards and money owed to family or friends.
  • Prioritize these debts: Rank your debts in the order you want to pay them off. Depending on your financial situation, the best strategy could be to prioritize debts with either the largest remaining balances or the highest interest rates.
  • Make room in your budget for debt repayment: Your first step in reorganizing your budget should be to cut back spending as much as possible. You may eliminate unnecessary expenses and live a little leaner than you are used to so you can prioritize your debt payments. You might also consider taking on additional hours at work, adding a part-time job or finding other sources of income to help you make these payments. The goal is to create more available cash.
  • Begin paying off your debts in order. Put all the extra cash you can afford into your primary debt while making minimum payments on the others. You will be able to work down your list this way and focus on one debt at a time while staying current on your other repayment responsibilities.
  • Start building an emergency fund: As you get your debts paid off and begin having more disposable income, work to start building up your savings. An emergency fund will allow you to take greater control over your money and avoid setting yourself up for debt woes again in the future.

The months and years after a Chapter 13 bankruptcy can be challenging, but it’s important to know that there’s a light at the end of the tunnel. For further guidance, contact an experienced bankruptcy attorney in Dayton, Ohio at Fox & Associates Co., LPA.

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