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Paying down debt to stop harassing phone calls from creditors

It can be difficult for New Jersey consumers to sort through all of the advice concerning the quickest and most efficient method of paying off debt. Two of the most commonly used and discussed methods are the "debt snowball" and paying down high interest debt first. Either way, one goal of nearly every consumer struggling with debt is to either avoid or stop harassing phone calls from creditors.

Those who are proponents of paying off high interest debt first are looking toward the goal of saving more money in the end. However, if the high interest debt is also large, it could be some time before any results are tangible. This may discourage many consumers.

This is a big reason there are so many supporters of the debt snowball. This method advocates paying off small debts first in order to see concrete results. As each debt disappears, that payment amount is then added to the next smallest debt until everything is paid off. This method is more behavior based than math based, which could be why many people find it a better method to pay down debt.

Both debt reduction methods require as much extra income as a person can spare to be applied to the debt he or she is focusing on at the time. Of course, regardless of the debt reduction method chosen, the minimum payment will need to be made on the debts that are outstanding. This eliminates the accrual of extra interest and fees that will only add to the total amount owed.

As good as it may sound to pay down debt in one of these manners, there are many New Jersey consumers that simply do not have the luxury of choosing either method. Making minimum payments may be difficult or even impossible, so finding additional money just is not going to happen. However, it is still possible to stop harassing phone calls from creditors by filing for bankruptcy protection. Bankruptcy typically offers many consumers the opportunity to be debt free while laying the groundwork for a return to financial stability.

Source: Chicago Tribune, Spending Smart: Paying down debt: How best to erase debt?, Gregory Karp, Nov. 15, 2013

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