Debt can affect Tennessee residents in a variety of ways. They may have a small amount of debt that they can easily pay off over time, or they may have overwhelming amounts of credit card debt that they are uncertain how to handle. Because many individuals may not know the best way to take care of their debt, they may consider options that are not always the best for their state of affairs.
One option that some individuals consider is to take care of their highest credit card balance. They may believe that paying off a high balance will leave them with less debt that they need to handle. However, if those parties have lower balances on other cards with high interest rates, those rates could cause those lower balances to turn into considerable amounts of debt.
Another route that some parties may look into is taking out a 401(k) loan. Because parties believe that they will not be using their retirement funds for some time, they may also believe that they have plenty of time to replenish those funds. However, reducing the amount of money in a retirement fund may also reduce the amount of interest those funds could be accumulating. As a result, individuals may be left with less retirement money.
For Tennessee residents who are facing seemingly insurmountable credit card debt, reducing debt over time may not be a feasible option. Luckily, these individuals do not have to feel as if there is no hope. Bankruptcy options may be able to help certain parties discharge qualifying debts and work toward a fresh financial start.
Source: fool.com, “3 Unwise Ways to Pay Down Your Personal Debt“, Matthew Frankel, Oct. 11, 2015