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Boosting a credit score while lowering debt in Massachusetts

Paying down debt can be difficult, especially if someone has high interest rates and a large balance. The ability to pay down debt for Massachusetts can depend on a variety of factors from financial obligations to income. While paying down debt in a systematic way can help, there are other financial options to consider. Those can range from formulating specific ways to target financial obligations to filing for bankruptcy.

One financial journalist at US News has a variety of recommendations for paying down debt. Important tools like developing the snowball method where extra money is placed toward debt can help. Another method is to try and get specific accounts down to a zero dollar balance. This can help with the debt-to-credit ratio and boost a credit score. But, for those who are mired in a large amount of debt, bankruptcy can be another option.

While the journalist recommends bringing down a debt-to-credit ratio of 30 percent that can be very difficult if someone has a large amount of debt and a high interest rate. In that situation, personal bankruptcy can help someone keep his or her home while getting rid of a large amount of consumer debt. This can be for someone who has faced unexpected life changes in a struggling economy. That may mean losing a job or a significant portion of income. Personal bankruptcy can help eliminate debt.

With smaller amounts of debt, developing financial strategies to help with obligations can be extremely helpful. Those strategies can be put into place after a bankruptcy filing. For large amounts of debt, bankruptcy can be an option to consider. There are different options available and those can involve a significant amount of technical information. Forming a strategy and filing for bankruptcy could put someone on the road to getting rid of consumer debt.

Source: US News and World Report, "How to Pay Down Credit Cards to Boost Your Credit Score," Abby Hayes, May 11, 2014

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