How do I get out of debt without paying it all at once?

Question

I want to start getting out of debt so we can afford some stuff for ourselves. I feel like I need to pay these debts off and then think about what we need in our home. I mean we have food and clothes and all but, just the things that needs replacements like furniture. How do I go about getting out of debt quick but not paying everything at once? I really don't want to deal with a debt counselor.

Answer 1

If you're not in trouble with the companies (meaning you're up to date and stay up to date on all of your payments) the thing to do is to start a debt snowball. List your debts in the order you want to pay them off. Usually it's best to pay off the smallest debt first. Then you send everyone minimum payments every month except the first debt to be paid off. You send them every cent you can above and beyond the minimum payment. Then when that is paid off you take the money you were spending on the payment to them and apply ALL of it to the next debt, in addition to the minimum payment you're making on the next debt. When that one is paid off, apply all of the payment you were making to that one to the next one. Your amount of money going to debt doesn't change but you keep getting more money to put towards other debts and it gets you out of debt quickly.

You're right not to want to deal with a debt counselor. If you do that kind of thing it looks like bankruptcy on your credit report. Just pay it off yourself, little by little, and you will get it gone.

Asking to be able to pay less than you owe is irresponsible. If you incurred the debts, you should pay them.

Try http://www.daveramsey.com. He knows what he's talking about.

Answer 2

Write down all your debts - list the total amt due, the payment amount, and whether the debt is overdue. Separate the overdue debts from the ones that are current. Sort both lists by the amount due.

Now pay the minimum on each one, except for the overdue loan with the lowest balance. Put every single spare nickel towards that one. Skip lunches out with your friends, get only small christmas presents for each other, skip big expensive vacations, even get a 2nd job if you can. Everything you can goes towards that loan.

When that one is paid off, put all the money you paid on that towards the next larger loan until it's paid off. Do this for the entire list of overdue loans, then run through the ones that are current the same way. When you pay off each one, ask the lendor in writing to be sure to contact the 3 big credit bureaus to show that the loans are paid. Buy a copy of your credit report every 6 months or a year to be sure that they did this.

This method will get rid of the smallest ones first, and you'll see progress faster than most other methods. This will help you stay on track because you're seeing progress.

Once you're done, think hard about investing some of the money you've been used to spending on paying off loans. You've gone without it for maybe several years by this point, so you know you can live without it. The key to getting rich is to spend less than you bring in, and to invest the difference. Good luck!

Answer 3

There are several ways...you could ask for a "pay-off", which in many cases, depending on the ammount of debt, can be a lot cheaper. You could also work with a loan consolidation firm, however, WATCH OUT and only pick a RELIABLE firm. Another way is to just declare bankruptcy. You can most likely keep everything and it isn't the end of the world. All of your debts just disappear. It will stay on your record for 7 years, but, for instance, my friend declared Bankruptcy and got financed for a car about 2 weeks later...then got financing for a home about 6 months later, so it CAN be done.

Answer 4

If you are having debt and money management troubles, check out a book called 'The Total Money Makeover" by Dave Ramsey. The author has a radio show on XM and Sirius and many public stations across the USA. Check his site out online.

Anyway, he teaches a "new" way to get out of debt. It is not really new. It involves tackling your debts smallest to largest. I won't ruin the book. If you are serious about getting out of debt - this is the book for you.

Answer 5

If we had more info about your income, debt and credit worthiness, we can better help you. You first need to write down all your income and your expenses each month, so you can see where your money goes.

Answer 6

Ralfcoder is exactly on the money and is advising you what I would advise. But I would also advise contacting those places you owe money to and ask about negotiating a lower interest payment. See what they are willing to do. You never know unless you ask.

Answer 7

listen to Dave Ramsey