Does anyone have any sensible advice on how to get out of debt?

Answer 1

debt consolidation

if someone wants to get out of debt today it is pretty easy with a debt consolidation plan
however it may get a bit tricky at times, I suggest you get as much information as possible online on this first,

a good place to start in my humble opinion is:

http://umgarticles.atspace.com/debt-consolidation.htm

Answer 2

Depends on how deep you are buried.

1) Look at all your financial costs, exlude the debt. So this could include rent, rates, food, a sensible clothes allowance, utilities, mobile phone, internet etc. List them all with name, amount and how often so you can see what ytou spend each month, week and year. You will need a monthly figure for later on.

2) Now list your income(s), breaking down what you get and where from and how often. You will need a monthly figure.

3) Now deduct your expenses from your income, and compare.
a) If positive, thats good. Work out how much you get left.
It would not hurt to skim back some more.
b) If negative, You are overspending. You must skim back.
i) Look at your costs to see what you can cut down; can you move to a cheaper property, do you really need a new dress every week, are you with the cheapest mobile tariff for you etc.

Keep skimming until you have got a positive figure. This is the amount to go for debt repaying called "DEBTBUSTER".

4) Now that we are stopping the debt from increasing, we can now work to clear the debt. List all your debts including who it is to, the amount, the interest rate, and any other notes.

5) Re-arrange all your debts in the following rules:
The highest interest first, followed by next highest interest.
For equal interests, take the highest amounts

6) For all but the highest interest, pay only the minimum amout from the debt buster, and pay the remainder of the debtbuster each month. When your highest interest rate is clear, move down the list, clearing each debt as you go.

What you have done is created a budget to help you live, adjusted your budget to help you clear your debt, and then killed your debts in order from the one charging you the most, to the one charging least. This way you both cut out your debt but avoid being eaten by interest.

If your debts are very widespread a Loan may be appropriate for you. This can from 3 sources:
1) Your bank or another loan provider
2) A credit card to consolidate your debts
3) Your family

If your debts are VERY large, you should seek guidance from a CAB about an IVF decleration to pull you out. But that is a tough situation to go into.

Finally, when you have cleared you debts, why not start putting that DEBTBUSTER amount into a savings account instead. Since you have lived without it before, you won't miss it now, and it will be giving you even more money.

Best of luck with your situation.

Answer 3

This is a difficult one to answer, as by the very nature of information needed to make a value judgement, this information is not available owing to its personal and sensitive nature.
However, some advice in a general sense may help:
1. Sit down with your partner, or alone if you do not have one, and make a list of all of your outgoings/expenses - say, per week. This list should include everything, from food and household essentials, to motoring expenses, gas, electric, telephone, water charges, rates or rent - leave NOTHING out.
If some items are paid or due monthly or yearly, then insert the proportionate amount for a week.
You should then arrive at a final total of weekly outgoings.
2. Make a note of your weekly income - wages, tips (declared or otherwise), savings interest, social security benefits or pensions. Add these up and you will have a final total of your weekly incomings.
3. Subtract the total of List 1 from the total of List 2 and you will see what you are 'worth' each week. This is your current position.
4. If your weekly worth is a minus figure - you must go back to List 1 and decide on where you can cut down your expenses. This may mean some hard choices, but this has to be done. You must try to reduce your expenses until there is a surplus from your income. It is much easier to reduce expenses than to actually increase your income - as the latter may mean a new job, or a second job.
5. Now, your debt. Of course this will depend on the type of debt, but one of the most common nowadays is a large Credit Card debt, where the interest element can be crippling. It is vital that you continue to make at least the minimum payments off your credit card statement, or your situation will worsen. You must then restrain yourself from using that credit card - cut it in half if you have no willpower! Then that debt will not get worse. Each month you must pay as much extra (above the minimum) as you can manage (from the income surplus achieved by reducing your expenses) - an extra 10% would be a good starter. The net result of this is that your credit card debt will then actually reduce - quicker than you thought.
6. I know that it is difficult, but the alternatives can be horrific - bailiffs calling, Court Summonses, bankruptcy ...
7. If it's NOT a credit card, then what? Well, if it is a Loan you must contact the lender, have a meeting, offer your sincere wish to pay off the debt, and ask for their help. Tell them the sacrifices you are prepared to make to reduce your expenses. They may suggest a new payment plan. But whatever it is, you have to live within your means, and the only way to do this is to REDUCE your outgoings to a figure below your income level.
8. What expense items are important to some people are less important to others. So it is heart-seaching time, to discover what you can really do without, or do with less of. When you have made your decisions, and can see light at the end of the tunnel, you will feel a lot better and less stressed. It will not be for ever - only until your debt is paid off. Thenceforward, with careful budgeting, things will look up.
9. Life can be hard, especially on the financial front, but the answer lies solely with YOU.
10. Other tips - (depending in which country you live) - can you get better prices from your electric or gas company? Perhaps you could get a monthly budget account with them to prevent the large quarterly bills. Do you need to use the car so often - could you share transport to work with a friend? Or walk if its up to 2 miles. Do your kids really need and that Coke and sweets all the time - can you convert them to healthier (and cheaper) eating? This list could go on, but you see the drift? And don't forget - when you find you can and are saving in one or more departments - give yourself a pat on the back!

Answer 4

There are consumer-credit counseling services that will intervene for you with the credit card companies and get your payments lowered. If you are out of work and have a huge pile of debt, you can file bankruptcy. The laws are a little stricter, but they generally won't take house or car if you are reasonably current with those payments. Its not getting out of debt that's the big problem, it's staying out. Even if you file bankruptcy, creditors will be lining up to get you on their card, knowing you can't file bankruptcy again for 10 years. You must think about what led you into debt in the first place, and work on changing those situations. If you can't resist spending, you have to leave those credit cards home. Some experts recommend putting them in a plastic bag and freezing them so you can't just use them whenever you want. Some people have more trouble saying no to themselves than to a child. Don't expect material things to make you happy. Don't try to over-finance a "lifestyle" so that your friends won't drop you. If they drop you because you can't party with them, it's their problem.

Try to buy small. For example, if you want to get a degree, take one course at a time and pay for it in cash, rather than financing a semester's worth of courses. School has become as much of a debt racket as buying a car. Even doctors and dentists won't bill any more -- they expect you to take out a credit card. But not every doctor and dentist is like this. Shop around and find one that will let you make billing arrangements.

The only time I have felt the need for a real credit card was when renting a car. They won't take a debit card because if you steal the car or total it, they could find that your bank account has been emptied and then they are out the price of a car. That's why they require a credit card. But there are still some rental car companies that will take a debit card -- they just require a deposit.

Finally, there are also some credit card companies that have a different setup, like a prepaid limit. Orchard Bank, I believe, is one. You need to call them and find out what they do.

Educate yourself financially. Clark Howard and Suze Orman are my two favorites. Good luck.

Answer 5

Pay your monthly living expenses first and then pay down your debt with the rest. Spend everything you have to pay down your debt. This means no movies, no dinners at the restaurant,... nothing until your balances are zero.

Pay off high interest debt first. If possible, get a credit card that offers 0% interest for 12 or 18 months and move some or all of your debt there. Once paid off, then either cancel the account or keep the account but pay off the balance every month.

Beware of credit counseling services. Many (most) are ripoffs feeding on desperate people in financial trouble. If any of them ask for a fee for any of their services, then leave immediately.

Answer 6

Contact a charitable company like the consumer credit counselling service (if in the UK), they will discuss all your options with you, you have a few!! One of which is to set up a debt management plan, which they will do, this means writing to your creditors letting them know you are dealing with a debt management company and then they take it from there. They work out what available money you have each month after all your bills are paid, they make allowances for living expenses, then they pay the creditors directly after you forward the agreed amount to them. There is no charge for the service. Or there is always bankruptcy.
Once debt free don't ever get credit again, it's like gambling, really addictive.

Answer 7

it depends what sort of debt you have and if you have the potential income to get yourself out of it. If it unsecured debt (i.e. not secured to your house) then the worst that will happen is that you'll get a CCJ (County Court Judgment) if it is secured against the house then make sure you talk to the companies that leant you the money. The citizens advice bureau will be able to help. In extreme cases they may suggest you take out an Individual Voluntary Agreement (IVA) where you have a structured pay back plan.

However if the debt is on credit cards then try and get it into an unsecured loan so you have a lesser APR and you have chance to pay it off.

Answer 8

Sounds silly but dont get into debt in the first place.
The only solution is to cut down spending on everything else and try to pay off this debt sooner than later - dont fall for these bullshit adverts (showing ugly people - supposed to be the general public) telling you to consolidate and get another loan etc.

Answer 9

Go to see your local citizens advice bureau, and talk to them about your problems. Do not get one of those longer term consolidation loans if you can help it, unless you like paying more over a longer term. Do not go on holiday, buy value food, cut out none essentials (Sky/cable, mobile phones, sunday papers, lottery etc). Get rid of extra credit cards/store cards. Take an extra job.

And the non serious suggestion would be... Find someone rich to marry.

Your local CA Bureau are your best first step, if you are really serious go and see them, they will at least be able to point you in the right direction. Good luck.

Answer 10

You have to plan to get out of your debts.First you list out your expenditure and reduce the less wanted expenses slowly and reach a necessity/need based expenditure.Pay out the higher interest loans first.Then consolidate all debts and transfer to one bank offering lowest rate of interest and go in for lower monthly instalment.Sell low yielding/no yielding assets and liquidate loans..Switch for a higher paid job or ask for a raise.Look out for parttime employment.Augment your income.You can do it.Good Luck.Remenber saving is automatic when spending is judicious.
No body is born in debt and no body should die in debt.