What are the first debt management steps people can take?

Facing debt from multiple sources can be overwhelming. Some Connecticut borrowers are able to get a handle on their amounts owed with some simple debt management planning and cutting back. For others, the debt load is much heavier and can require more action, up to and including bankruptcy. Here are some of the first steps people should take to manage their debt, whether it is large or small.

The first important step to take is coming to terms with the reality of amounts owed. Often, this means making a list of different loans as well as income sources. This can help someone understand if it is feasible to pay the amounts back, or if he or she is in over his or her head.

The next steps involve making a repayment plan. This often includes figuring out which loans to pay off first. Usually, this is the high-interest debt, followed by any non-deductible debt. During this process, it is a good idea for people to check their credit rating and have conversations with the institutions to which they owe money. Options like debt consolidation or repayment plans may help make them more flexible, though it is important to review these options carefully before signing any dotted line.

There are many things people can do to save money to pay down debt. This can include following a strict budget and even selling personal items. In some cases, the debt is too overwhelming for these debt management tips to be enough, and bankruptcy may be the best option. Connecticut individuals considering this route are advised to speak with a lawyer about their options and the bankruptcy laws in the state.