Not many Texans are free of debt. In fact, not many students graduate debt free, and those who do are considered lucky. For example, consider the situation of a woman who earned her degree in 2003 without incurring any debt. She got married, bought a house and a car and everything seemed to be going well. However, she then lost her job in 2008.
The couple assessed their financial situation and realized that they were $50,000 in debt and lost almost 75 percent of their household income. They immediately started to focus on their financial future and made a list of short-term and long-term financial goals. To pay off the debt, they tracked every expense they made and immediately cut down on their spending. She got another job, and both of them started doing side jobs. It took almost two and half years for them to pay off their debts.
This couple was lucky to have assessed their debt situation on time. Nonetheless, that may not be possible for everyone and paying off debt can prove to be difficult. A person may try to cut way back on expenses, save and do everything to eliminate the loans and stop creditor harassment. That person may not be able to pay off all of the debts. The interest on the debts can increase, and the person may have to face additional issues.
When a person faces overwhelming debt, the most important thing to do is assess the financial situation and take steps accordingly. The person can also take advice from a professional to understand the various options for debt relief. If that person wants to start fresh, the person can file for Chapter 7 bankruptcy. Filing for Chapter 7 Bankruptcy can help to discharge substantial medical debt, credit card debt and other debts that are eligible, while retaining possession of the house, car and other assets.
Source: FOX Business, “How I Paid Off $50K of Debt in Less Than 3 Years,” Christine DiGangi, Oct. 20, 2014