When you're deep in debt, it's easy to feel overwhelmed, and hard to know where to begin digging your way out. Recovering from debt is not easy, nor is it a quick process, but it is possible. Admit that you have a problem, account for all your debts and do whatever you need to to repay them, and you're on your way to recovery.
Know How Much You Owe
It's impossible to get out of debt until you know how much you owe. Gather all your bills, starting with your mortgage and car payments, credit card bills, medical bills and any other bills you owe, and tally up the amount you owe, and the minimum payments due every month. It's likely to be a sobering experience, but don't let it daunt you -- accounting for every penny you owe is a necessary step in pulling yourself out of debt.
Know How Much You Can Pay
Once you've got your debt expenses tallied, it's time to compare them to what you can feasibly pay toward your debt. Make a budget that accounts for all your income, all of your household expenses, and all of your debt. Don't be surprised if the income to debt and expenses ratio is tight, and be prepared to take another hard look at your budget to see where you can afford to make cuts.
Get Serious About Paying Off Debt
If you're serious about paying down your debt, sacrifices are often required. Tighten up your budget wherever possible to free up more money to pay toward your debt, even if it means giving up eating out, entertainment expenses and other things you can live without. If possible, bring in more income by taking a second job or selling items you no longer need. The more you can pay toward your debts, the faster your budget will recover.
Ask for Help If You Need It
Sometimes, it's just not possible to tighten your budget any more than you have, because your expenses are simply more than your income. In this case, it's time to talk to a reputable credit counselor. A credit counselor can get you on the road to debt recovery by working with you and your creditors to create a debt-management plan that will reduce your monthly payments and/or interest to make repaying your debt possible.
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