How to Try to Get Out of Debt Before Using Counseling Services

Using counseling services to get out of debt is beneficial, but these types of services often only work with people who have a certain amount of debt and using a company to manage your debt can look bad on your credit report because creditors may report "third party assistance." Before handing your debts over to a service, explore methods to eliminate debt on your own.

Instructions

1

Work longer hours to pay down your balances without counseling. Increase the amount of hours you work in a week by either asking for over-time or taking a second job after your regular hours.

2

Slash your interest rate on credit cards. Counseling agencies generally discuss rate reductions with your creditors. Achieve similar results by contacting creditors yourself and asking them to lower your rate.

3

Pull out your equity. Make good use of the equity in your home and apply for a home equity loan to consolidate your debts and pay them off over a few years.

4

Borrow from the value of your life insurance policy. Withdraw cash from a whole life policy and use this cash to pay off your debts.

5

Pay more than your minimum. Significantly reduce your balance on credit cards and loans by paying more than the minimum every month. Start making bi-weekly payments on loans to help reduce how much interest you owe and pay down these debts faster.

6

Control spending to alleviate debt quicker. Limit the amount of new debt incurred by using cash. Pay off any new credit card charges within a month to keep on the right track and eliminate balances.