Being in debt can make you feel depressed and unsure of what to do next. When you create a plan to get out of debut, you'll feel better about your situation and start to regain control of your life. According to the National Foundation for Credit Counseling, getting out of debt can happen in as little as 30 to 60 months with the right program.
Review Debt
Exactly how much do you owe? How much do you earn per month? What bills do you have to pay in addition to the debt owed? These answers need to be clear. Knowing exactly how much you owe and what expenses you have to pay gives you power. You'll be able to see where your money is going and where you might be able to cut costs. Financial guru Suze Orman has a financial worksheet at her website (SuzeOrman.com) that will help you keep track of what you are spending and the amount of your debut.
Reduce or Stop The Calls
Talk to your creditors. Acknowledge what you owe but that you need time and help to pay your debt. Ask about a lower payment and negotiate to figure out a payment plan you can afford.
Reduce your current bills so you have more money to pay off your debt. Spending more on electricity than you need? Turn off extra lights. Do you really need cable TV for the next six months? Reduce the number of channels or cancel it to save money and spend that money instead on your debt.
Additional Income
Sometimes you can pick up extra work to help pay off debt. Babysit or work a part-time weekend job. Apply any additional income to your debt or it isn't doing much good.
Get Help
Ask professionals for assistance. An accountant can help you look over your debt and show you where you stand. A debt counselor can help show you how to reduce your bills and negotiate with debt collectors. A credit counselor can negotiate with credit card companies, reduce your monthly payment, and show you steps to improve your credit while you're paying off debt.
Don't pick consultants blindly. The Federal Trade Commission warns people to ask important questions to a credit counseling company before signing anything. Ask ahead of time if the compancy is licensed, what services it provides and what fees it charges.
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