Lists of Ways to Get Rid of Your Debt

The average American household has over $16,000 in credit card debt alone. Medical debt has caused over half of bankruptcies in 2001. By the time you add inyour vehicle, mortgage and utilities, it may seem like a lost cause. However, with determination and know-how, you can conquer your debt more easily than you may think.

Make a Budget

Create a budget.

This is the number-one step in ridding yourself of debt. Crunching numbers can set you free. Write down your net income for the month. Then create a list of all of your debts and divide them into monthly payments that you can afford. Using tools such as credit card calculators can help make a budget you can afford, and help make your goal to get out of debt more realistic.

Cut Expenses

Slash your spending.

Stop excess spending. Little things such as one gourmet coffee a day can add up to $1000 a year. One dinner out a week (averaging $20) would save you $1040 a year. Start applying the extra money you save to your bills, and you can be debt free in much less time.

Need vs. Want

Drive out of debt.

Create a list of your needs vs. wants. Example: You need a vehicle for transportation. You want a sports car. Consider what fits into your budget right now. Maybe you can downgrade from a gas guzzler to a more conservative vehicle. You will save money on gas, insurance and payments. Start saving, and get your dream car once you get the debt load off your shoulders.

Debt Consolidation

Save thousands on a low rate.

Cut rates in half by consolidating all your loans into one. Get a co-signer if possible to give you a better rate to save even more money. If you pay the minimums on credit cards, it can take you up to 20 years to pay everything off. Consolidate your debts into a fixed rate and save thousands in interest and reduce your term.

Debt Settlement

Settle for half.

Settle your debts. Collectors would rather receive 50 percent than nothing at all. Call your creditors and explain why you were unable to pay the full balance. Most creditors will offer a payment plan or make a settlement offer.

Bankruptcy

Seek alternatives.

Filing for bankruptcy should be a last resort. Although some have no choice, it is advisable to consider all other options first. Bankruptcy does not wipe your record clean. Seek advice from a credit counselor before filing for bankruptcy.