Have you recently looked at your finances and asked yourself, "How did I get here?" Many people have found themselves drowning in debt in Pittsburgh. From long periods of unemployment to unexpected medical expenses, there are a number of reasons why people end up overextended and carrying a heavy burden of debt.
When you find yourself in this kind of situation, it will not help to ignore the debt and pray it goes away. There are many ways to get your debt under control and paid down, including filing for Chapter 7 or Chapter 13 bankruptcy. Your attorney will be able to help you choose an option that suits your specific circumstances. Understanding the top causes of debt will help you avoid falling into the same traps in the future.
Lower income, steady expenses
In many cases, when people take a pay cut, their expenses do not follow. Your rent or mortgage is going to stay the same, your electric, water and phone bills probably will not change much, and you will still need to buy groceries and other essentials. Many people start to rely on credit cards to make up for the difference, which often leads to constant indebtedness. By making an effort to reduce your living expenses (those that you can control), you will be better able to manage your finances.
Divorce is expensive. You will not just be paying high court fees and handing over a large sum to your divorce attorney, you could be doing so with only half of the assets you previously had access to. In addition, you might also find yourself paying alimony and child support as part of your settlement. Many people find themselves facing insurmountable debt after a divorce.
Not managing your money
While the idea of creating a monthly budget may seem tedious and unnecessary, in reality it might be the best thing you can do to avoid debt. When people do not know where they are spending their money, they can easily overspend and find themselves in debt. This can happen when you spend more on non-essential items than you should. By tracking your spending habits, you can see where your money is going and where you can cut costs and maintain control over your finances.
Empty savings account
Many people find themselves in debt because of unexpected expenses. For example, you might suffer an illness and need extensive medical care or perhaps your car breaks down and you have to pay for the repairs. Life happens, and when it does, it often costs more money than expected. Prepare for that rainy day by beefing up your savings account. By making small changes in your spending habits, you can start to save money and have a safety net ready for those unexpected expenses.
If you have found yourself with more debt than you can handle, it is important to remember that there are options available for you to get your finances under control and pay down the debt.