As 2024 draws to a close, many families in Arizona and across the country find themselves in a worse situation financially than this time a few years ago, or even just last year. Much of this has to do with factors outside of our control, like rising costs and market pressures that have only gotten worse since the pandemic. But there are some steps that individuals can take to offset these negative effects as much as possible. The actions you should take to improve your financial situation in 2025 will depend on your unique circumstances and the goals you wish to achieve. Bankruptcy might be an important tool in getting your finances back on track, or it may be exactly what you are trying to avoid. If you would like to learn more about the bankruptcy process in Arizona and are seeking a free consultation with an experienced debt relief professional, contact our firm for your free consultation at (602) 649-4949. 

Stay On Top Of Credit Card Spending

Credit cards can have exorbitant interest rates that lead to debt that is difficult to overcome. Therefore, one might think that a bankruptcy law firm would advise individuals to avoid credit cards as much as possible. This simply isn’t an option for some, and credit card spending can have positive effects when done responsibly. Having a revolving credit balance contributes to your credit score, so making purchases on your credit card can help a spender build their credit history. Most credit cards come with rewards programs that allow you to earn points and exchange them for airline tickets, cash back, and more. But the most fiscally responsible way to take advantage of these benefits is by paying off your balance in full each month. This way, you won’t accrue interest, often at rates of 25% or higher, on your purchases. Once you fall behind, you will be subject to late fees and other charges that will make it even more difficult for you to resolve the past-due balance. If you can’t pay off the full balance, pay off as much as you can- eventually, your minimum payment may only cover interest. 

These days, it’s easier than ever to run up a high credit card balance. Expenses like housing and groceries have increased at a much faster rate than salaries, and many companies wring the most out of their customers through subscription models. You should review your credit card statements to make sure there aren’t any services you pay for that you no longer wish to receive. This can also help you assess your spending to determine if there are any areas where you can cut back- for example, you might frequently eat takeout or make impulse purchases on Amazon. You can delete these apps off your phone to reduce the temptation you feel to use them. 

If you do ever fall behind on your credit card payments, the situation can get out of control quickly. The longer you try to ignore the situation, the more interest and late fees will accrue and push you even further into debt. After a while, you may come home to a summons on your door alerting you to your credit card company’s lawsuit against you. Ignore it and it will turn into a default judgment. If the credit card company secures a judgment against you, they can use it to garnish your wages and more. Stop a wage garnishment at any stage in the process by filing for bankruptcy- get started today with a Phoenix and Tucson Zero Down consultation by phone at (602) 649-4949. 

Make Sure You Aren’t Sinking Money Into Underwater Assets

When financing a home or vehicle, it sometimes makes sense in the moment to agree to unfavorable financial terms in order to get the deal finalized. Even if it ends up costing you thousands of dollars over market value over the course of your payment plan, it may be what’s necessary to purchase a car to get to work, move into a better housing situation for your family, etc. But if your circumstances change, that trade-off may no longer be worth the cost. We have seen countless clients come through our doors with car payments that look like rent payments, albeit from a few years ago, on gas guzzlers with body damage and mechanical issues. If you file for bankruptcy, this gives you an opportunity to let go of an asset that has become a burden, as well as the attached monthly payment. You can review the market value of your assets compared with your contract, as well as what you could expect from a potential replacement in the current economic climate, with a member of our Arizona bankruptcy team, free of charge. Get started today with your free consultation at (602) 649-4949. 

Regularly Monitor Your Credit To Stay On Track For Your Financial Goals

Almost every financial goal that you could set for yourself can be made easier by improving your credit score. The first step to improving your credit score is checking your score and which factors are keeping it from increasing. You may have old bills that could be paid off to clear bad marks off of your credit- paying them in full will have the maximum effect on your credit but many creditors will also accept a reduced alternative payment arrangement. There could also be accounts on your credit report that are inaccurate, like if you already repaid the debt or it is a case of mistaken identity. Regularly monitoring your credit will also help alert you if someone has stolen your identity and opened accounts in your name. 

If you have a feeling that you may be declaring bankruptcy in the new year, you may be wondering how it will impact your credit. Filing for bankruptcy will disqualify you from a home mortgage for 2 years, so you should start discussing the issue with a bankruptcy lawyer now if buying a new home is a priority for you. Your bankruptcy filing will appear on your credit report for other financial applications- ten years for a chapter 7 and seven years for a chapter 13. This could hurt your chances of getting approval on some loans and even working in some industries, such as finance. You should also keep monitoring your credit after bankruptcy to confirm that all of your debts are cleared from your report. 

Educate Yourself About Bankruptcy Before It’s An Emergency- Schedule Your Free Consultation With Our Firm Today

If there is only so much budgeting can do to repair your finances, it may be time to consider filing for chapter 7 or chapter 13 bankruptcy. Both types of personal bankruptcy freeze your assets so they are safe from creditors while you work towards clearing or reorganizing your debt. And both types of filings tend to fare better when the debtor has time to strategically plan their case. If you start preparing sooner, there are bankruptcy issues you can spot so they become less of an obstacle during your case. Our skilled Arizona bankruptcy lawyers can discuss your situation in detail to determine which type of bankruptcy is best for you. Schedule your free consultation today at (602) 649-4949.