Anyone know a way to get out of debt? No gimmicks or outrageous costs?

Answer 1

Well, if you a non-fixed rate mortgage and/or bunch of credit card debt, it maybe wise to consolidate them all. Interest rate maybe higher than your current mortgage, but it is definetly way lower than the average interest rates of your credit cards put together.

Consolidating will put all your debt into one lower monthly payment. I will apply some of the save money back to the principal (or use all of it) to accelerate the debt. If you only apply some back to principal, you should definetly invest the rest. That way, when you finish paying off your debt, you will have some decent amount of money tucked away for retirement.

You should also ask about the bi-weekly payment. This will cut your monthly payment in half and you pay this amount every 2 weeks.

Answer 2

Like some have said, it would help if more was known about the type of debt. Since credit card debts are the most common, I'll address those.

- Destroy them. ALL of them. If you're in debt, you can't afford an "emergency card" The emergency is already here.

- Pay more than the minimum on as many of them as you can (Most financial advisors will tell you to make the extra payments on the cards that have the highest interest rates. This is financially good advice but may not be personally good advice. If you can do it that way, more power to you. Some people though, mostly because they're so depressed or anxious about their debt, will feel better if they make extra payments on the cards with the lowest balance. That way you'll get a least one card paid off and that will encourage you to keep going, not to mention you can now roll the entire amount you were paying on that card into the payments of one of the other cards. I like the method of putting half the extra down on the card with the highest interest rate and half the extra down on the card with the lowest balance)

- Call the credit card companies and see if they'll give you a better interest rate. Bluff if you have to- tell them you're thinking about filing bankruptcy (they'd rather get the money at a lower rate than nothing at all) or that you're rolling the amount over to a 0% interest card.

- Roll over the balance to a 0% card if you can. Just watch out and see what the interest rate on the card will be when the 0% introductory period is over. Don't roll over the debt unless it's lower than the rate you've got now (unless you are -realistically- sure you will be able to pay off the debt in the introductory period. Also, don't forget when you get the new card- DESTROY IT!

Good luck and remember- your credit isn't hurt anymore by going to credit couseling but there's also nothing they can do for you that you can't do for yourself if you're willing to put the time and effort into it.

Answer 3

This does not take a rocket scientist.

First off, cut up your credit cards and send it back to the respective companies. Start paying them back. Tighten up your belt a bit. Yes, I mean it.

Second, spend only when you have cash. Keep everything on a cash transaction basis. If you do not have money for an item, you do not need it. Be *very* strict with that approach.

Do a soul search: real deep - why, how or when you got into that mess? Do not repeat that again. Simple uh?

We are talking about self-discipline. That's all there is to it.

Don't take a short cut - like bankruptcy. It is very traumatic and it will be hanging over head for a long time. Even getting a job may be difficult in some cases. Do not follow some of the ideas given here by others relating to bankruptcy.

Answer 4

Figure out how much you make and what it costs you to live (at bare minimum). Determine the difference.

Then take all of your debt and compute the yearly interest cost using the applicable rate (if you are already in default use the default rate).

In all probability you cannot even cover the interest on your debt with what you have left over. Unless you have a hidden asset somewhere which you can use to pay off the debt plan on filing for bankruptcy.

Credit counselors will only put you farther in debt. Credit counselors are merely "subtle" collection agencies supported by creditors.

Answer 5

I feel the best way to relieve debt is to look at a home based business as a second income stream.

The average income for Americans is in the 28,000 per year range. With a home based business that moves to over 56,000. In addition over 80% of the Home based business are still in business in 3 years.

The question is what is the amount extra you need to earn, and how much time can you devote to this endevor?

I can give you more information via mail ([e-mail]) or phone [phone] if you are interested.

The part time business I started is earning just about 1200/month and I am spending 8-12 hours per week.

Best Regards

R Wittenburg

Answer 6

It would help if you were more specific about what kind of debt it is, what the monthly payments and interest rates are, how much you do pay, how much you could afford to pay, how your credit is??
The best way to start to tackle credit card debt on multiple credit cards is to start with the highest interest rate first. Send minimum monthly payments on everything EXCEPT the card you have the highest interest rate on. Pay as much as possible on that one. And don't charge anything more to it.
Then when you've got that one paid off, do the same thing with the next highest. You can also try calling the cedit card companies and see if they can offer you a lower interest rate...

Answer 7

It's not as easy to got out of debt as easy as it is to get into. First and foremost you must destroy the credit cards. If you don't have the cash to buy them you don't need them. Try to consolidate your debt with a lower interest loan. You must keep a diary on every expenditure you make and monthly try to eliminate an expense. Good luck, it's good that you have seen the light before it is to late. Retirement will come sooner than you would like and then it is to late to fix the problem.

Answer 8

Like a previous poster said, pay it or file for bankruptcy. But after the new bankruptcy laws, you are still liable for certain types of debt.

My advice - pay it. I speak from personal experience on this - after getting out of college with $30k in student loans, I was then brilliant enough to rack up an additional $15k in credit card debt. I was obviously in way over my head and ended up with late payments on almost every account that I had and was extremely close to being sued by at least 2 of my credit cards. I was able to consolidate my student loans, which gave me smaller monthly payments. For my credit cards, I contacted one of the "debt consolidation" companies where they negotiate smaller payments with your creditors. The person that I initially spoke with basically told me that most credit card companies would make these arrangements directly with the card holder (this was about 5 years ago, so I don't know if they still do this). I contacted the CC companies myself and told them that I was trying to avoid bankruptcy and would they offer me any payment plans. Of my 5 credit cards, 3 companies agreed and 2 did not. On the condition that I made the agreed-upon payment ON TIME EVERY MONTH, the companies waived the "over the credit limit" fees that I was being charged and also adjusted my interest rates. 2 of the companies cut my rates almost in half. Obviously, I had to sign an agreement that I would pay or go into default immediately, blah blah blah.

I also got a second part-time job and cut all "extras" from my monthly budget. I then calculated how much I could afford to pay each month towards my debt. Fortunately I had a little bit extra above my minimum payments, so I made the minimum payments on all accounts and put all of the extra payment towards my lowest credit card balance. This way, I was able to get the smallest account paid off quickly. When that account was paid off, I applied all of my extra money (including the amount that I had been paying on the account that was just paid off) to the next smallest account, and so on until all of the credit cards were paid off. Once the credit cards were paid, I applied the extra payment amounts to my student loans.

It was a slow process, but it kept me out of court and I was able to get all of these debts paid off. Most of the late payments will be on my credit report for another year or 2. However, because of their age, they don't seem to have a huge impact on my credit score (which is currently about 715).

Good luck.

Answer 9

Budget, budget, budget!

With credit cards, don't forget to make the first, most important step - stop using the card!!

Whatever you do, DO NOT pay the minimum only on your credit cards - this will only keep you in debt longer!! Do whatever you need to do to pay as much as you possibly can each month.

When I was paying my credit cards off, I took my minimum payment, doubled it, then added in whatever the accrued interest was. Took a little time, and a little scrimping on my part to do it, but I'm happy to say that aside from my mortgage, I'm debt free.

Answer 10

There are very few ways to get out of debt.
1) Put yourself on a tight budget. Anything saved, put toward debt.
2) Consolidate to a lower interest rate.
3)If you can't save, sell things you don't use.
4) bankruptcy