U.S. Census Bureau data indicates that the age group carrying the highest debt load in America is those aged 35-44. In fact, the group has a median debt of $108,000, 25 percent higher than the second highest most indebted age group. Because of this large debt load, many Arizona residents may be considering taking a step such as declaring personal bankruptcy. However, following some debt management tips may help improve the situation.
Firstly, it’s important to not neglect taking care of future financial obligations, such as retirement or saving for a child’s future. Managing debt doesn’t have to mean paying off all the debt a person owes. Instead, getting rid of the most pressing debts, while also planning for the future, can have a larger impact on total, long-term financial health. This also includes avoiding damaging one’s credit score with late payments and checking one’s credit report regularly.
During this time period, many people will see their income rise. This may bring an opportunity for new tax breaks on debt, such as mortgage debt, that requires an itemized return. Considering these tax breaks may play a role in determining which debts to prioritize. However, paying off credit card debt, with its high interest rates and fees, is often one of the best ways to help improve a person’s total debt picture.
While taking these steps may be able to help many improve their debt management situation, those who have lost their job or are facing other financial hardships may have to make the difficult decision to file for bankruptcy protection. A Phoenix bankruptcy attorney may be able to review an individual’s financial situation and determine if bankruptcy or another option is best for that person and their family.
Source: Daily Finance, “4 Tips to Help 30-Somethings Manage Their Debt“, Dan Caplinger, August 13, 2013