Having some debt is a normal part of life, but debt can often stand in the way of pursuing our dreams and goals. If your goal is to have your own business, realities such as car and student loans and medical debt can limit the amount of money you can borrow for your new venture.
Personal debt can hurt your business
If you are already treading water with your finances because of several things such as back taxes, a large mortgage or credit card debt, it just takes one expensive crisis with your business to become underwater with debt. Before that happens, there are different debt pay down methods you can try.
Get a game plan
There are different schools of thought for debt pay down that take a systematic approach. The first method is to focus on paying off the debt with the highest interest rate first. This gets rid of your most expensive debt first.
The second debt paydown method is for those who like to see the results of their efforts quickly. It involves paying off the smallest balance first. This way, you will have fewer bills to pay, which can be a powerful motivator to stay the course. If you have excessive tax and consumer debt, you may want to prioritize paying off these are two areas of debt first because they carry the highest consequences for non-payment and the highest interest.
A financial safety net
If you experience a significant problem that eventually pushes you into a dire situation,
don’t hesitate to talk to an experienced bankruptcy attorney to check out your options. Knowing ahead of time can increase your number of options and increase the amount of help that a debt professional can give you.