Manage Your Debt Before the Holidays


As the holiday season approaches, it is important for consumers in Oak Park to think carefully about their finances and current consumer debt, and ways to avoid overspending on gifts, travel, and other costly ventures. As a recent report from Consumer Affairs explains, consumers often do not plan ahead for the economic costs of the holidays, and as a result, they end up taking on more credit card debt that they may not be able to pay off in the New Year.
How can you be financially prepared for the holidays? What steps can you take to avoid insurmountable debt that could lead to personal bankruptcy?
Holiday Debt can ‘Snowball’
As the report notes, “debt accumulated during the holidays can stick around, and continue to snowball, well into the New Year.” Indeed, a recent study determined that Americans add more than $1,000, on average to their credit card debt during the holiday season. While that might not sound like a lot of money in the short term, if you already owe thousands of dollars in credit card debt, you could end up paying significantly more in the long run.
The study reported that “about half of those surveyed planned to chip away at their debt over more than four months or just make the minimum payments—which could extend the debt to 10 years or more and tack on nearly $400 in interest.” In other words, even going into debt by an additional $1,000 during the holidays can have long-term effects. What can you do to prevent holiday debt from snowballing?
Develop Strategies for Spending this Holiday Season
One of the keys to avoiding significant holiday debt is planning ahead for your spending limits. The following are some tips for Oak Park consumers to consider as Thanksgiving and the rest of the holiday season looms:
  • Determine how much you can spend ahead of time. This means looking at your monthly expenses, considering the amount leftover that you have to spend during the month, and then consider ways to economize. Write down the amount of money you have to spend during the holidays, and do your best to avoid going over that budget.
  • Make a list of people for whom you need to buy gifts. One of the first ways to avoid going beyond your holiday budget is to make a list of everyone that you plan to buy a gift for, and to determine the budget for gifts based on the amount of money you set aside.
  • Try to set aside money each week. If you typically buy three to four coffees at the local coffee shop each week, consider cutting back on coffee and saving that money for the holidays. It can add up.
  • Pay for gifts and other holiday items with cash (or your debit card) instead of using your credit card. By paying with the funds that you actually have now, you can avoid going into debt to buy gifts for others.
Seek Advice on Your Debt from a Consumer Protection Lawyer
Many Chicago residents are struggling with consumer debt. In some cases, filing for Chapter 7 or Chapter 13 bankruptcy may be able to help. An Oak Park consumer protection lawyer can discuss your options with you. Contact the Emerson Law Firm today to seek advice from an experienced advocate.
See Related Blog Posts:


Comments

Post a Comment

Popular posts from this blog

Payday Lending and Predatory Lenders in Illinois

If you are in substantial debt in the Chicago area and are living in a paycheck-to-paycheck cycle, you may have taken out a payday loan to make ends meet. While payday lending is illegal in a number of states due to the predatory nature of these loans, it remains legal in Illinois. As a result, many debtors in the state have used payday lenders, and far too many of those borrowers cannot repay what they owe. According to a recent article from Progress Illinois , consumers have filed complaints about payday lenders in the state, illuminating a need for federal rules that address harmful lending practices . Predatory Payday Lenders and Protections for Consumers Due to the perceived predatory nature of payday loans, twelve states in the country have banned these lenders from operating completely, according to a fact sheet from loans.org . The states that currently have laws prohibiting payday lenders from operating include Arkansas, Arizona, Connecticut, Georgia, Mary...
Read more

Phantom Debt Collection Scams on the Rise in Illinois

Have you been contacted by a person claiming to be a debt collector who is seeking to recover a debt you allegedly owe? If so, you are not alone. According to a recent report from CBS Chicago , such parties claiming to be debt collectors are on the rise, and they are scamming Chicago-area residents. These alleged debt collectors are part of schemes known as “phantom debt collection scams,” since they involve the attempt to collect on a debt that the consumer does not actually owe. How can you avoid becoming a victim in a debt-collection scam ? What should you do if you have been targeted by a fake debt collector? How Do Phantom Debt Collection Scams Work? Now, you might be thinking to yourself: I would never agree to make payment on a debt that I did not owe. But the scam is not always that simple. Parties at the center of debt-collection scams often target consumers who do actually owe debts (to someone or to some entity), and they prey on the fact that these c...
Read more

New Information on Debts That Bankruptcy Cannot Discharge

If you are thinking about filing for bankruptcy in the Oak Park area, it is important to know that certain kinds of debts cannot be discharged in a bankruptcy case. Under U.S. bankruptcy law, these are known as non-dischargeable debts, or exceptions to discharge. There are certain types of debts that have long been identified clearly as non-dischargeable debts, while there are misconceptions about other types of debts that may or may not be dischargeable. As an article in CNBC discusses, the U.S. Supreme Court recently issued a ruling in the case of Bartenwerfer v. Buckley , which clarifies that debts incurred due to another party’s fraud cannot be discharged in an individual’s bankruptcy case. Our Oak Park bankruptcy attorneys can explain the Court’s recent ruling and provide you with additional information on dischargeable and non-dischargeable debts. Supreme Court Says Debt Incurred Due to Another’s Fraud is Non-Dischargeable The recent Bartenwerfer case involved a debtor attempti...
Read more