Signs of Financial Hardship & Solutions that Can Help!
Sep 29, 2023Does the mention of your financial situation stress you out? You are not alone. The cost of living continues to rise, and more and more people are living paycheck to paycheck. Sometimes you don’t even realize the state of your finances until it is too late. Maybe you are aware of your bad financial situation but don’t know what to do about it. Let’s review some common warning signs of financial hardship and different debt relief options available in Wisconsin that can help.
MINIMUM PAYMENTS ONLY
Most people know that just making the minimum payments on their high interest credit cards or lines of credit is not a great financial choice, but sometimes it is a necessity. It can be a short-term solution but can turn into a long-term problem if not addressed. Making only minimum payments on debts with high interest rates can increase your debt and make your financial situation worse.
SPENDING MORE THAN YOU MAKE
Most people know that you shouldn’t spend more than you make, but that is not always easy. You may not even realize it until it is too late. The best way to determine if you are spending more than you make is to create a budget. Making a budget allows you to manage your money and can help find ways to reduce your expenses, pay down your debts and increase your savings.
NO SAVINGS OR EMERGENCY FUND
Most people know the importance of having a savings account and emergency fund, but it is not always possible, especially when you are living paycheck to paycheck. If you have no savings or emergency funds, you are not alone. According to a 2023 survey done by Bankrate, nearly 1 in 4 adults have no emergency savings. Without savings, you fall back on your credit cards, lines of credit, or payday loans when an emergency arises, which can make your financial situation worse.
BORROWIMG MONEY TO PAY BILLS
Most people know that borrowing money to pay bills is a bad idea, but often feel as if they have no other choice. When emergencies happen or debt piles up, you may find temporary relief using one source of credit to cover another. Unfortunately, it just creates a vicious cycle and can ultimately lead to debts going unpaid, high interest and penalties.
PASS DUE BILLS & DEBT COLLECTION
Most people don’t miss payments on purpose; usually there is just not enough money to go around. Creditors only allow debts to go unpaid for so long before it is sent to debt collectors, or they sue you in court in order to garnish your wages. A wage garnishment can be 20% of your gross wages, which can be devastating to your already difficult financial situation.
ADDRESSING THE WARNING SIGNS
If you are continually dealing with one or all the situations above, it can indicate financial hardship. You are probably already aware of it, but are overwhelmed and uncertain on how to overcome it. Figuring out your debt relief options can be intimidating. You don’t want to choose the wrong debt relief option and make your situation worse. However, waiting to find a solution can limit your debt relief options. There is no shame in asking for help.
DEBT RELIEF OPTIONS
There is not one debt relief option that is right for everyone, but the sooner you take action, the more options you will have. You should review your specific situation and circumstances with an experienced debt relief attorney. Debt relief is what they do. Use their knowledge of debt relief options to your benefit. For instance, an experienced debt relief attorney in Wisconsin will know the benefits of a Wisconsin Section 128. A Section 128 is only available in Wisconsin, it stops interest, lengthens the repayment window, stops garnishments and is a great option to handle a lower amount of high interest debt. Learn more about a Wisconsin Section 128 and other debt relief options in our blog, “Debt Relief Options in Wisconsin”. We review the following debt relief options: consolidation loan, home equity loan, 401(k) loan, debt management plan, Wisconsin Section 128, Chapter 7 Bankruptcy and Chapter 13 Bankruptcy.
No one plans to get into more debt than they can handle. Unfortunately, life doesn’t always go as planned. At Pedersen Law Office, LLC we understand how stressful being in debt can be; that is why we offer free consultations. We will meet with you personally to help you figure out the best debt relief option for you and help you through the entire process. Our law office serves the communities of Appleton, Neenah, Menasha, Oshkosh, Green Bay and their surrounding areas.