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Read MoreMathematically, it's often better to invest extra money rather than pay down a low-interest mortgage early. However, the psychological benefit of being debt-free is powerful. If you choose to pay it down, ensure you're already maxing out retirement savings and have no high-interest debt.
Use agencies approved by the National Foundation for Credit Counseling (NFCC) or the Financial Counseling Association of America (FCAA). Avoid debt settlement companies that charge high fees and make unrealistic promises.
Creditors may request documents to verify your hardship, such as a layoff notice, medical bills, a divorce decree, a death certificate, or recent pay stubs and a budget showing your income shortfall.
Healthcare debt refers to money owed for medical services, treatments, medications, or procedures that are not fully covered by insurance or paid out-of-pocket, often leading to financial strain.
A common and effective budgeting rule is the 50/30/20 rule: 50% of your income for needs (rent, food), 30% for wants, and 20% for savings and debt repayment. If your debt is significant, you may need to temporarily increase that 20% by reducing your "wants" category.