There is a four-letter word that can upend a person’s life. It is not profane in origin but can create an avalanche of grief in one’s present and future financial status. This word is debt and Americans are carrying a heavy load of it.

On average, most Americans owe over $200,000 in debt. A big chunk of this debt comes from credit cars. The average credit card debt that is owed totals $15,000. A major source of debt creation lurks in the everyday spending habits of Americans. Credit purchases made today can lower credit scores and negatively affect a consumer’s ability to earn future credit. For example, a low credit score can prevent a consumer from purchasing a car or home.

There are effective steps that can be taken to improve the status of one’s debt. First, check credit reports. This report will give a clear picture of what is owed and reveal if there are any errors in a credit report that are costing a person money. Second, a plan for repayment must be made and followed. Finally, consider all possible options for debt payment. If someone is still drowning in debt after eliminating all extra-curricular spending, it may be time to consider bankruptcy.

Bankruptcy is a viable means of eliminating debt. Depending on the details of one’s financial situation, a Chapter 7 bankruptcy may help achieve debt relief. Kansas farmers may also be able to utilize Chapter 7 to keep ownership of valued farm land. A bankruptcy attorney can provide guidance on the available options and the best recovery for each person’s situation.

Source: www.huffingtonpost.com, “The 4-Letter Word That can Ruin Your Credit,” Adam Levin, February 27, 2014.

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