what would be the best way to get out of debt?

Answer 1

Of course, make the decision to stop going further in debt. This includes taking our future loans (other than a mortgage).

As to your current debt, my suggestion would be to utilize something called a debt snowball. First you list each debt from lowest to highest balance order. Then you knock off the lowest loan amount as fast as possible. You could just take a second job doing something like delivering pizzas or papers until you have eliminated that first debt.
Once the first loan is paid off, take the original payment of that loan and start applying it to the next one plus that ones payment. As you get closer and closer to the last one, they will start being paid off faster and faster.

Example
CC 1: $3000, 200/mo
Personal Loan $4600, 240/mo
CC 2: $5000, 275/mo
Car: $7000, 310/mo

After Car 1 is paid off
CC 1: $0, 0/mo
Personal Loan $4000, 440/mo (200 from CC 1 + 240 from original payment)
CC 2: $4600, 275/mo
Car: $6700, 310/mo

After P.Loan is paid off
CC 1: $0, 0/mo
Personal Loan $0, 0/mo
CC 2: $4300, 715/mo (440 from P.Loan + 275 from original payment)
Car: $6500, 310/mo

Consolidating may lower payments or even make things easier for the time being. But in the end it often costs you much more in the way of interest. Using this debt snowball, you could see that debt be completely gone in under two years (faster if you can knock off that first debt quicker than if you just make minimum payments). The key is if you pay a total of $1000 (or what ever your current payments amount too) in payments, just keep that amount consistant (again if not more) until all debts are gone.

Answer 2

The first thing I would do is check to see what type of interest rates you are paying on your debts. If they are high, I would try to consolidate them into either one larger loan with a better rate or at least several smaller ones with a better rate. If you own a home, look at refinancing. If you own a car with a large payment, look at downsizing to a less expensive car. Stop unnecessary spending like shopping, eating out, too many social activities. Think about downgrading some of your extra services such as cell phones, cable TV, high speed internet. You don't have to cut them out completely, but there may be areas where you can at least "trim the fat" and pay slightly less each month.
Once you do some of those things, dont spend the extra money you have each month! Make extra payments on your debt to pay it off faster. If you are only making the minimum payment on your credit cards or other consumer debt, it will take quite a while to pay it off.
another thing to remember: start paying off your debts that have the highest interest rate, not the highest balance.
Just live cheap for a while and pay every extra penny to your debt. it will be worthwhile in the end!

Answer 3

Pay off your debts with the highest interest rates first. Pay as much as you can to this credit card for example. Once that card is paid off do the same with the next card and so on. decide on a specific amount to pay each month instead of a percentage of each monthly debt (this will just drag things out more). Don't let yourself get too far in debt because the interest will kill you.

Answer 4

Some of the above answers are great. But one thing that you should do is get in contact with your creditors and let them know that you are in trouble. The last thing they want to see happen is for you to have to go bankrupt. Most banks/credit card companies are understanding of the situation and can help you come up with a repayment plan that wil suit you and them. If not, consolidate and cut up your cards. I went part IX and i wish to god that I had not because now with a fantastic job, a car paid off and the part IX paid off - i still can't get a loan for another 5 years. Do the best you can to stay away from these sorts of agreements if possible. Just talk to the creditors!!

Answer 5

I suggest Dave Ramsey's plan. It is simple and he lays it out from getting out of debt all the way to saving for retirement and giving.

The book I would start with: The Total Money Makeover

His website: www.daveramsey.com

We have been using his system for a year and have already paid off $15,000 in debt.

Answer 6

stop buying more debt, stop using credit cards and spend less than you make. don't eat out as much, use coupons. find ways to save or if necessary get a 2nd job to help pay down debt.

Answer 7

cut up your credit cards and then get a loan to pay all your debt off.

Answer 8

when i was deep in debt i used this page to compare different options available to me. worked like a charm!

Answer 9

Find creative ways to generate more income. 2nd job, etc.