Another month comes around, and you find it hard to open the mail in fear of never ending bills. Is your debt piling out of control with no clear way for you to stop, or better yet, end it?
You may have gotten far into debt but this does not mean that you cannot take steps to get out of it. There are lots of options out there to get out of debt.
There is credit counseling and debt consolidation. You can also work with a lawyer to help reduce your debt. Lawyers do charge a fee for this that will need to be paid. They can also help you file for bankruptcy. However, this will damage your credit and it will take a long time to repair it. There are choices and to get out of debt without going this route.
To get out of debt on your own, you will need to develop a plan and stick to it. You can always ask the collector if they are willing to lower the interest rates as you pay back the debt.
Put the credit cards away. Stop using credit cards, taking out loans, to buy things that you do not need. Look at your house and see how much "stuff" you have bought over the years that bring you no value. Somethings you may have used once and never again. Other things were bought on a whim and just add to more clutter. If you only need two pillows, why buy more?
You should know where you are spending your money each month. If you're not sure where your money is going, write down all your expenses for a month and then make your budget. A budget will allow you to see where your money is going and make cuts to pay off your debts.
Stop unnecessary spending and make some cuts. For instance, eat at home instead of dining out. Do you really need another pair of shoes this summer? Or spend on the movies or vacation this year. Look at lifestyle changes that will reduce spending. This will free up money to go towards your debt.
Decide which debt you need to pay off first. If you have secured debts other than a long-term mortgage, you may want to pay them off first. High-interest credit cards, or monthly fees, should be near the top of the list.
Pay the smallest payment each month on all your debts except the one that you have given top priority. Put the extra funds toward that debt, and continue to pay debts off. If you get a bonus at work or unexpected money from some other source, consider putting it toward your debt as well.
Once you get your debt paid off and the priority is done, you should move on to the next one. Do this until all of your debt is paid off. At this time, you should have developed good habits and should not have to worry about getting into trouble with debt again.
Paying off debt on your own is often easier than you think. Taking a realistic look at your finances, you can often find ways to come up with the money to pay debts off without the help of anyone else. Doing so helps us maintain good credit, or rebuild our credit if it is imperfect.
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