Finance and BusinessMoney Management

How to get out of debt

It is certainly not easy to get out of the yoke of indebtedness and no longer resort to this means. Luckily, you’re reading this article because you’re probably already weighed down by debt and don’t know how to get out of it. Learn how to avoid incurring new debt and change your life forever.

How to get out of debt

Dealing with credit card debt

Reduce your interest rates. If you have good credit, contact the company that issued the credit card to you and ask to lower the interest rate . It’s a great way to reduce your interest charges and save money each month.

Pay off high-interest credit card debt first. If you can’t lower your interest rates on certain high-interest credit cards, pay them off first. In this way, you will reduce your interest charges over time by reducing the balance of said credit cards.

Consider debt consolidation loans. If your credit is good, you can consolidate your credit card debt into a debt consolidation loan. You will find that it is easier to pay once a month, rather than several times. In addition, it should be noted that the interest rate applied to debt consolidation loans is lower compared to that applied to credit cards.

Stop using credit cards. To be sure that you can get out of debt, you must avoid incurring debt . Switch from using credit card to using debit card. This way, the amount you spend will be directly deducted from your account.

Pay more than the minimum refund if possible. Credit cards are designed to keep money flowing to the company holding the credit card for as long as possible. Avoid falling into a trap that harms your financial situation and benefits your creditors by paying more than the minimum repayment as soon as you can afford it.

Manage your money

Develop a budget. If you really want to pay off all your debts, you need to keep track of all your expenses and all your income. This way, you can put pressure on yourself to incur only strictly necessary expenses each month .

  • Make a list of all your sources of income. Be sure to include all of your sources of income, whether from employment, investments, interest income, etc. Total your monthly income.
  • Make another list of your monthly expenses. Be sure to add in all the expenses that you normally incur monthly, including bills, groceries, gas, restaurant meals, course fees, etc. Also total these monthly expenses.
  • Deduct your total monthly expenses from your income. If you earn more than you spend (and you should), the result should be your discretionary income and could be used to pay off debt.
  • Make sure you stick to your budget each month. If you exceed it, you will have less money to spend on savings or paying off your debt.

Earn more money. To effectively deal with your debts, you need to increase your income. You can do this either by finding a second job (if you are employed) or by increasing your commissions (if you are in sales). It is true that you will have to devote all your time to it, but it is necessary to do so, if you really want to repay all your debts.

Reduce your expenses. Look each month for ways to reduce your expenses so that you have more financial resources to pay off your debts .

  • Do you eat too often in restaurants? Save money by cooking your own meals.
  • Can you reduce your electricity bills by saving energy? For example, do you really need the air conditioner downstairs, while everyone is sleeping upstairs at night? Are there electrical appliances on all the time that shouldn’t be?
  • Consider using coupons to save money on shopping.

Consider using debt relief programs

Talk to a credit counselor who is not in the business of making money. Your advisor will help you come up with a plan to eliminate all your debts and will contact your creditors to reduce the interest rate on your loans . You can find a credit counselor who does not aim to make money on the website of some financial organizations .

Opt for debt settlement. If you can no longer control the evolution of your debt, your creditors may think that it is better to take something than to take nothing at all. If so, they might be willing to accept some of your debt rather than receiving nothing at all. In this case, if you repay your debt to a company that accepts it, your debt will be eliminated entirely. To achieve this, you will also need the assistance of a financial adviser who specializes in debt.

  • Be aware that this choice will negatively influence your credit rating. This will be seen as insolvency or a write-off of your credit card debt.

File your balance sheet. One of the less attractive options for repaying your debts is of course filing for bankruptcy, as it could damage your reputation. However, you will be protected from your creditors and a judge could simply erase all your debts .

  • Consult a lawyer who specializes in handling bankruptcy cases for their opinion on the subject.
  • If you choose this option, your credit report will not be good for 7 years.


  • If you like an item, save for a period of time and then buy it. You should only use the loan for basic necessities (housing, car). Do not borrow for the purchase of furniture, small household appliances or even for your holidays. If you do not have sufficient funds to incur these expenses, it means that you cannot do so.
  • Pay as often as possible in cash. Paying in cash has a more significant psychological impact than with a plastic card. You feel like you are spending too much and therefore you are reducing your expenses.
  • Do not go directly to debt consolidation or credit counseling agencies. This should be your last resort! Although it’s tempting, if you’re looking to pull yourself together, doing it on your own will help you develop the skills you need to deal with your problem and avoid finding yourself in such a situation in the future.
  • In the United States, anyone can get a free credit report from each of the three companies every 12 months through
  • Know that credit card companies are not your friends. They would like to see you always in debt by paying a minimum amount each month on their credit card, for your entire life. (They list your credit card payments and consider that as their asset.) So you have to pay back what you owe them and after waiting a few months (without using the credit cards) you have to seriously consider closing those accounts. . It is much better for you to use a debit card which you can obtain from your banker. In this way, you can still continue to use a card for your purchases, but with the difference that this time the amount of your expenses will be deducted from your current account, which will allow you to avoid having to pay more . Also, by closing your credit card accounts a few months after you’ve finished paying them off, you’ll keep a good showing on your credit report.


  • Avoid the trap of granting salary advances at all costs. It’s a quick fix that will cause you to face a debt snowball effect. Before even thinking about resorting to a salary advance, think first of the other resources at your disposal such as family, friends, anonymous debtors.
  • Be careful with low interest credit cards for balance transfers. The absence of interest rates will almost always cause you to go into even more debt.
  • Don’t rush. Closing a revolving credit card account would likely impact your credit rating. This could reduce the length of credit history that needs to be reported and make you appear unreliable. Carefully choose the credit card account you want to close. Keeping the old cards and getting rid of the new ones will solve this problem. However, you will still need to consider the different rates when deciding which card you should close.
  • Try not to give too much personal information to collection agencies as they record everything you say. Keep the conversation friendly and short. Do not even try to answer private questions and try to know your rights.
  • Find out about the regulations of the companies in order to know if these companies are registered with the competent authorities. Find out if many people have filed complaints against them and if these complaints have been resolved.
  • Reckless spending and debt can be very dangerous habits just like alcohol addiction and the like. Spending can be an escape or hide more serious problems. See a professional if you think you have a problem.

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