Debt Resolutions Worth Keeping

If you make one resolution a priority this year, freeing yourself from debt is one that promises to be life changing and can bring positive change to other aspects of your life. New research shows that those who resolve to change their financial habits at the start of the year get ahead at a faster rate than those who do not.


Getting out of debt may seem impossible and harassing collection calls can make you feel discouraged. It is important to remember that the act of moving forward to change things will not only begin to improve your financial situation but will begin to give you hope you can build momentum on.

Here are some ideas to get you started:

Know What You Owe

Up until today it may have seemed scary to see your total debt. It may have seemed easier to “estimate” or “ballpark” your total debt. But, in the long run, knowing exactly where you stand is far less stressful because it empowers you to make smart decisions and begin to deal with reality head on. Not opening your mail or ignoring debt will only keep you in the dark on a very big part of your life. You may also be shorting yourself on opportunities, rights, and can often make things far worse if you are in collections and you miss a court date. Start by tallying up your debt, listing all creditors, collectors, loans, mortgages, and credit cards. Organize everything so you can clearly see status, interest rates, and balances.

Know Your Rights

Debt collectors can make you feel like you have no options. You do have options and protections under the Fair Debt Collection Practices Act and Massachusetts consumer protection laws. First, you have the right to validate the debt. Debt collectors such as Midland Funding, Lustig Glaser & Wilson, PC, CACH, Portfolio Recovery Associates, Cambece Law Office, Kream and Kream, or The Schreiber Law Firm, or any other creditor must provide detailed documentation to validate their claim and must cease collection activity until they have provided documentation of the debt. If you feel the debt collector is violating your rights by making excessive or threatening calls or representations or is attempting to collect a debt that isn’t yours or has already been paid, you may have claims against them, which could both eliminate the debt and put dollars in your pocket.

Automate Payments

The easier you make your debt repayment plan, the more likely you will follow it. Set up your top priority debts for small auto-payments out of each paycheck. High priority debts should be those in collections or have the highest interest rates. Even if you get paid on a weekly basis, set up auto-payments so the money is immediately withdrawn. Studies show individuals are more likely to stick to a repayment plan when they don’t have to consciously think about the act of making the payment each time. Even applying small amounts towards your debts will gradually chip away at the overall weight.

Reduce Your Rates

Every little bit helps and reducing your interest rates even by a little can add up to financial savings that can greatly benefit you as you chip away at the debt. If you pay your credit cards in a timely manner and have been a long-time customer, sometimes asking is all it takes. A study by found that two-thirds of people who asked for a lower rate got it. Another option is a balance transfer. Many credit cards offer promotions of 0% interest for year. Avoid using these to withdraw more cash or run up higher balances. Instead use them strategically to combine debts with the highest interest rates to save long-term.

No Loans to the IRS

A large tax refund only means that throughout the year you’ve been loaning the IRS money interest free. Extra dollars were taken out of your paycheck all year that could have been used to pay down your debt avoiding additional interest. Adjust your withholding on your W-4 form. Use the withholding calculator to figure out exactly how many allowances you should take to break even without owing tax or letting the IRS keep your money all year.

Settle Debts

If your debt is in collections, there may be an opportunity to settle for pennies on the dollar. Especially if there are issues with the debt or your rights have been violated in any manner, you may have leverage to contact the debt collector to offer a settlement. Sometimes having professional guidance on this by a reputable consumer protection attorney can help protect your rights and handle the negotiation on your behalf. This strategy can possibly save you thousands of dollars getting you closer to being debt free.

“Don’t make change too complicated, just begin.”

We may be able to help set things straight. Give us a call to set up a free debt consultation.



CULIK LAW is a Massachusetts based law firm who believes in doing good work in our New England community to help individuals Champion Your Rights. We help clients with debt, credit reporting, mortgage, consumer protection, employment, and personal injury. If your rights are being violated or you need a new beginning, we want to hear about it and find a way to help.