I hesitated to add a financial section to this website, because the site’s theme leans toward the transcendental, but then, how metaphysical and inspired can you be if fears over money problems are eating away at you?
Easy Ways to Get Out of Debt
Exactly how hard or easy these debt escaping methods are is in the eye of the beholder – so – in my opinion – easy is the wrong word.
Effective – actionable – those are better fits – because some of these might feel pretty hard, but keep an open mind because they do work.
How Do We Get Out of Debt?
If you haven’t already done it, put together a budget that shows your income and living expenses.
- If the troubling part of the debt is separate from your living expenses, like old medical bills or student loans, list it at the end, or on a separate page.
- Compare your income to just the part of your expenses that you need to live – your mortgage, your car and insurance, utilities, food, that kind of thing.
- Hopefully, there is something left of your income after you pay the basics.
- If not, you are going to have to look for ways to either increase your income or cut expenses, until there is a surplus, if you want to get out of debt.
One way to cut monthly payments is to take advantage of bill consolidation opportunities with your lenders. This is an especially common practice with student loans.
- Hire a bankruptcy lawyer: If money problems are too severe and overwhelming, bankruptcy is an alternative for some people.
- Ask creditors for a reduced settlement offer: A reduced payoff, or debt settlement, is offered in some cases of long-term unpaid debt.
- Contact a credit counseling service to help you work out a budget you can live with and to arrange reduced payments.
Credit Building or Rebuilding
In my case, a lot of bad decisions had left me with damaged credit, so I had to make some lifestyle changes. I had to take on extra work, and I had to swallow my pride and get a cosigner to get a car loan.
It took me a little over two years, but I have paid off everything I had in collections and have never had a single late payment on my car payment.
- I watched anxiously as my credit score slowly – and I do mean slowly – increased – over 140 points. (Yeah – it was pretty bad.)
- I actually had a $20 claim against me, pulling my credit score down, and it was a bill I had paid but the creditor “forgot” to report it as paid. I thought I was going to have to give in and pay it a second time, but I filed a complaint, and the credit bureau checked it out, found in my favor, and removed it from my credit report – so – check your report first – for errors – because they do sometimes fix them!
- The advantage of taking care of credit reporting errors and paying the smallest bills first is it lets you see improvement quickly. It’s motivating and makes you feel positive about the task of escaping a mountain of debt.
- So, my advice for credit rebuilding is, get your credit report, and pick the smallest debt on it – and pay that first.
- Then, make payments, and don’t miss any on your current loans and debts, and also stay focused on making payments on large past due debts, too.