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Debt relief needed for young, overtaxed families

Scores of young Americans are suffering from financial burdens including student loan debt, mortgage and car loans, and even overdue medical expenses. Even though the economy appears to be on the upswing, it can still be difficult for young Washington residents to make ends meet, especially when they have been spending above their means. For these individuals and families, debt relief is a critical topic that can make the difference between a bright future and one fraught with financial instability.

Young families face financial challenges in the current market, especially if they are weighed down with debt from their educational pasts. Those loans can quickly add up to more than $100,000 between two people. Even when both work, it can be difficult to make ends meet. Some families find relief by moving in with family members, selling their vehicles and taking other measures.

These changes may be helpful, but experts say that the most critical move would be to simply eliminate credit card debt and put the cards away in a safe place for emergency use only. Changing your debt-to-credit ratio can help improve credit scores. Yes, that means living within your means, even if that requires slashing entertainment budgets and other luxury items or experiences. Families can also sell expensive cars in favor of more modest options.

Sometimes, though, young couples simply get in over their heads because of spending in their early adulthood. This can happen to couples at any income level. For those families, Chapter 7 or Chapter 13 bankruptcy may be the best option; tackling financial problems head-on is the best way to set yourself up for future money success. A bankruptcy will have a short-term negative effect on your credit, but imagine the relief that can occur when the stress of bills and overdue notices is gone! Washington families who are interested in learning more about the benefits of filing for bankruptcy may consult a qualified bankruptcy attorney to learn more about their options.

Source: Wall Street Journal, "First, cut up the credit cards" Daniel Lippman, Dec. 15, 2013

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