The Kitchen Table

Debt. The word alone causes most people to shudder, and with good reason. Overwhelming debt is a source of immeasurable misery for many. The crushing weight of debt has the power to hold you back in life, and not just financially! Debt has the power to destroy relationships, your health, even your career.

According to NerdWallet's 2015 American Household Credit Card Debt Study, the average U.S household with debt owes $130,922 -- including credit cards, mortgages, auto loans, student loans, and other forms of debt. That is more than twice the average annual salary of a two-income family. What that boils down to is a lot of hard working families struggling to pay their bills. If you are one of the many American’s dealing with the pressure of this kind of insurmountable debt, then now is the time to take the first steps towards relief.

• 1.Do call your credit card company: Many people don’t realize it, but you can call your credit card company and ask them to lower your rate. They might say no, but most have hardship programs and they may be willing to help you out. It would cost them a lot less to lower your interest rate by a few points than it is to engage in collection action.
• 2.Do call your lender: Explain your situation and try to set up a payment agreement that better fits your budget. Remember, it needs to be a reasonable dollar amount. You want to have your accounts paid off in a timely manner, not just extending the life or your loan and thereby increasing the amount of interest you are paying. You can also ask about a debt-consolidation loan with a lower interest rate.

It’s easy to make rash decisions when you are overwhelmed by debt, here are a couple of things “not to do”.

• 1.Don’t skip on paying secured debt, (like your car) in order to pay an unsecured one, (like a medical bill). You will risk losing your collateral.
• 2.Don’t pull money from your retirement savings to pay an unsecured debt. That money is already spoken for, it’s going to take care of you in the future.

Most importantly, know that it’s ok to ask for help. You don’t have to deal with debt on your own, but if you seek credit counseling make sure you pick an agency accredited by the National Foundation for Credit Counseling or the Financial Counseling Association of America. Make sure you understand the fees and the alternative ways you may have for dealing with debt.

*Employees of LPI Loans and our affiliates are not attorneys and LPI Loans DOES NOT provide any legal advice and users of this web site should consult with their own attorney for legal advice.