Bankruptcy is not always the most appropriate way to resolve outstanding debt. For example, if an individual’s debt is not too much in comparison to his or her income, a bankruptcy lawyer might recommend another kind of debt resolution strategy. The snowball credit card debt payoff method is one such alternative way to rapidly pay off your credit card debt.
The snowball debt solution involves several steps to complete it successfully. The first step is to list your debts out on a page from smallest to largest. It doesn’t matter how big the interest rates are. Make sure to pay the minimum on all the debts aside for the smallest debt on the list. Then start paying off that smallest debt as aggressively as possible.
When the smallest debt is taken care of, all the money being applied to the smallest debt will then be shifted to the next smallest debt. Pretty soon, as the smaller debts are taken care of, more and more of your income will be released to pay for your other outstanding debts, until, at long last they will all be gone.
Here’s how it might work: Let’s say you have a $500 bill that requires a $50 per-month debt payment. Then you have a $7,000 bill that requires a $135 per month payment and a $10,000 student loan that requires a $96 per month payment. When the first three debts have been paid off, you’ll have released an extra $185 a month to apply to your student loan until it is eventually taken care of as well.
At the Law Office of Ruth Nelson, we frequently give our King County clients advice on how to take care of credit card bills. That advice doesn’t always involve bankruptcy because sometimes other options are available.