How to Set Up a Debt Repayment Plan

A little debt may not seem like a big deal, but when it grows to the point that it seems uncontrollable, it is more than just out of control. Debt can consume your life, especially if it comes from a crisis such as unforeseen medical bills, job loss and even unintentional overspending. Set up a debt repayment plan to help you find freedom from your financial woes and develop good spending habits.

Instructions

1

Make a list of all the debts you owe, including the total amount due, the monthly payment amount and the interest rate associated with each debt.

2

Rank your debts in the order of their repayment priority. Financial expert Dave Ramsey recommends paying off the smallest debts first and the largest last so you can get out of debt more quickly.

3

Call your creditors. Rather than have you default on loan payments, creditors often have programs that will work with you to help you make your monthly payment. The Federal Trade Commission (FTC) recommends you explain your situation to a creditor and see if they will provide you with a lower interest rate and/or a lower monthly payment.

4

Compare your total monthly debt payments due and your monthly budget. Plan to pay the minimum amounts you owe each month to your creditors, but use any extra money you have in your budget towards paying off the smallest debts first.