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How to reduce debt after college?

On Behalf of | Jan 20, 2023 | Bankruptcy

Did you just graduate from college? Then you, like many others, have likely built up an overwhelming amount of debt and not just student debt. Many students receive credit card offers and take advantage of the “buy now, pay later” concept, leading many people to build up large sums of debt.

You’re likely thinking, “How am I going to pay off all of this debt by the time I’m ready to buy a car or home?” The good thing to know is that, while your debt seems like a colossal wall, there are ways to reduce it. Here’s what you should consider

Pay off your credit card one at a time

Many people believe it’s best if they pay each credit card equally. It may actually be beneficial to pay off one credit card at a time. This way, once you pay off one card, you aren’t suffering from interest from every card. However, you shouldn’t overlook your other cards and still continue to make minimum payments.

Minimize purchases

Many college students spend their credit cards like crazy. Some people use them to purchase school books and supplies, while others use them for pizza and beer. Whatever the case may be, you should consider limiting your credit card purchases and making a spending plan (if you still need to use your credit card for essentials).

Don’t apply for new credit cards

Even after school, many graduates still receive credit card offers. While it’s tempting to take on new debt while you’re still paying off other debt, it may be in your best interest to eliminate the debt you have now before agreeing to more debt.

File for bankruptcy

Paying off credit cards one at a time and reducing your purchases to eliminate your debt will likely still take some time. However, many people don’t want to wait that long. Instead, people often file for bankruptcy to quickly and totally eliminate their credit card debt. There are many options for bankruptcy, such as Chapter 7 and Chapter 13 bankruptcy, each with its unique advantages.