Get Out Of Debt… Starting Today

Steps You Can Take to Get Out of Debt

When debts first become unmanageable, often we take the wrong kind of action. Rather than facing the reality of our situation, we go to extremes to cover it up, sometimes creating our own misguided debt management plans that involve working two jobs, skipping necessary payments, allowing balances to grow, taking out payday loans or additional credit cards, pawning things, and making sacrifices that amount to poor health or interpersonal decisions. Our own debt management plans might involve hiding cash, telling lies, and even fighting with loved ones.

Get Better, Not Worse

Without knowing the proper steps to take, we make the situation worse, and at the same time, everyone in our lives begins to suffer. We fail to recognize that the only real solution at this point is to get professional help. Taking matters into our own hands, we ignore debt relief options for years before it finally dawns on us that none of this is working. Knowing that your own debt management plan isn’t going to work and probably never will, and that real help is available, is your first step. After you’ve accepted that, many more options open up.

Step 1: Gather All Your Financial Information

Although you might want to speak anonymously with a debt consultant first, assessing your situation accurately and completely requires knowing exactly where you stand with your debts and finances, so early in the process, you should begin to gather all your records of bills, loans, creditor information, collections, payments, income history, and bank accounts. The more information, the better, and ultimately you will need all of it to create a viable working plan.

Step 2: Meet With a Debt Consultant or Credit Counselor

Once you know that you can accurately describe your situation, speak with a non-profit debt consultant or credit counselor. Non-profit agencies can provide free information and do a free, confidential assessment of your financial situation. They’ll let you know what they think the smartest course of action is and get you started on it. Sometimes just knowing you have to take action, and knowing that simple steps are available, is the first form of debt relief you’ll experience.

Step 3: Validate Debts and Speak with Creditors

Before you do anything else, you might be advised to speak with your creditors about hardship plans or other arrangements that will allow you to pay back debts on your own. It really depends on your situation. Another early step is to validate your debts, which can slow down the collection process, provide needed documentation, and verify any debts that seem questionable to you.

Step 4: Decide Between Debt Management and Debt Elimination

When you speak with a non-profit debt consultant or credit counselor, you’ll get free advice on how to proceed next, which might involve one of two approaches: either a debt management plan, or a debt elimination plan. While both of these types of plans can have a similar goal, there may be differences depending on your situation. For example, you might be able to sustain and manage certain debts while eliminating others, or you might need to focus on becoming completely debt free.

Step 5: Compare Debt Relief Programs

Among the different types of debt relief programs are various options that work best in particular circumstances. Sometimes different programs can be combined into a comprehensive debt management or a debt elimination program. Other times they are best used individually. These options include personal budgeting, debt consolidation, debt negotiation or settlement, and as a last resort, bankruptcy. Everything depends on your own circumstances, but counselors and consultants will work with you to come up with the right plan.

Step 6: Take Action and Get On With Your Life

Once you have a plan, it’s time to commit to it. Out of everything you’ve done so far since you’ve been in debt, this step takes the most discipline and commitment. Debt relief programs only work when you follow them, and usually they take a couple years, so you have to be ready to stay dedicated to the path you’ve chosen. The result will be a brighter, easier future, so taking action has its rewards. Once you begin to see the results of your hard work, and once your debts begin to finally disappear, you’ll be ready to get on with your life.