As Texas residents consider different approaches to reducing their financial obligations, they may become familiar with the concept of the snowball method. This involves paying off small balances so that monthly funds allocated to such accounts can then be used toward accounts with greater balances. In theory, this is considered to be a motivational tool that enables individuals to see a level of success in their debt reduction efforts. However, this method of realizing small victories may not be the best approach for some consumers.The attitude of the account holder can play a significant role in what happens next after certain credit card debts have been paid off. For example, some may view the unused balance as wiggle room for spending more, an issue that can undermine their efforts to get out of debt. In other cases, paying off low-interest credit cards may allow high-interest balances to continue to wreak havoc on one's budget. Experts recommend building an emergency fund to avoid the need for credit card use when unexpected situations arise. Additionally, some recommend wise use of zero-percent transfer offers to reduce the amount of interest being paid. However, it is important to weigh the benefits of a no-interest offer against any transfer fees.Unexpected situations can occur in spite of careful handling of credit, and an emergency fund can be depleted if a catastrophic medical situation arises. In such situations, credit cards might be used to handle basic necessities or medical bills. As these issues occur, debt can become unmanageable, at which point bankruptcy might be a serious consideration.In deciding whether to file for bankruptcy, consumers will need to have a clear picture of their financial situation. Assets, debts and income can be factors in the bankruptcy options available, and credit counseling is required before filing for bankruptcy. Legal insight can be helpful as decisions are made during this process.Contact our experienced and reliable Houston bankruptcy lawyer for the financial and legal counsel you need--schedule a case evaluation!
