Getting into debt is easy enough to do in our world of wanting what we want now. But getting out of debt, that can be a big problem. This article will give you five options on how to get out of debt.
Many of us feel overwhelmed by financial burdens that have put us way in over our heads. That feeling of being overwhelmed doesn’t get easier to deal with unless we have a concrete way of dealing with our debt.
This is not necessarily a great option, but for some people it may be the only way to get out from under a mounting avalanche of debt.
To be honest, I filed bankruptcy about five years after I graduated from college. I was in deep financial distress with credit cards, a car loan, students loans, personal loans and a house loan.
I was making the minimum payments each month, but that was it. I was not gaining any ground, at all. The interest on all of these forms of credit was costing me more each month than I actually made.
After discussing the situation with my parents, we agreed that my best alternative was to file bankruptcy. I went through the process and filed on all the credit cards. I was paying my house payment to a private individual so I didn’t include that. My student loans could not be filed on and I needed to keep my car, so I didn’t file on that.
There were some good things that came out of the bankruptcy.
First of all, I didn’t have that huge pile of credit card debt sitting on me like a 1000 pound weight.
Second, it did free up a little money to keep me solvent so I could keep paying my student loans, house payment and car payment.
Third, I didn’t stay up late at night obsessing about all the money I owed. (I stayed up late doing other things, but at least I wasn’t obsessing about debt!)
There were also several bad things that came out of the bankruptcy.
First, when I wanted to get a different car, I had to have my parents co-sign for me.
Second, after I sold my first house and wanted to get a different one, again, my parents had to co-sign a loan for me.
Third, I felt like a “loser” because I couldn’t pay my bills and had to file bankruptcy.
Fourth, and this is pretty major one, my credit score was in the tank. It was so low, I couldn’t even get certain jobs! Twenty years later, when I applied for a position as a chamber of commerce director, I almost was denied the job because of my still struggling credit score. ( I would be dealing with chamber finances.)
If you feel this is your best option, there are many lawyers who specialize in bankruptcy. Check your phone or phone book under “bankruptcy” and you are sure to find someone in your area who can help.
Remember, though, these lawyers do charge for this service and you have to appear before a judge.
4. Credit counseling
There are many forms of credit counseling available. The big reason I did not use this option when I decided to file bankruptcy was because I had been advised that many people who choose this route to deal with debt end up filing bankruptcy anyway. I figured I was not going to “waste my time” with another step along the way to the inevitable.”
I think credit counseling services have changed since I filed bankruptcy about 25 years ago, but if this is an option you would like to explore, here are some things to keep in mind.
According to the Federal Trade Commission article Choosing a Credit Counselor, “A reputable credit counseling agency should send you free information about itself and the services it provides without requiring you to provide any details about your situation. If a firm doesn’t do that, consider it a red flag and go elsewhere for help.”
This article also details many questions to ask when looking for a credit counseling agency, a debt management plan and more. Many of these agencies charge for their services, so make sure this is the route you want to go before you sign anything on the dotted line!
3. Sell some of your assets
If you used credit cards or other loans to get the stuff—or even if you didn’t, you may want to consider returning it or selling it and getting the most from it so that you can lower your debt.
There are many ways to sell your assets.
- Swap and sells on Facebook or other social media platforms
- eBay, Amazon, Craig’s List or any number of selling apps that are on the market. Some are obviously better than others so do your homework.
- Have a garage sale alone.
- Have a garage sale with a bunch of friends.
- List your items for sale in an ad in the newspaper.
The options and ways are only limited by your imagination. Every few years my family and I have a huge garage sale just because we need to downsize a little.
2. Employ Dave Ramsey’s Debt Snowball
American radio show host and businessman Dave Ramsey, who is known for giving excellent and well-received credit and financial advice, created the debt snowball.
What is the debt snowball? It is a basic way to pay down your debt by paying off your lowest debts first and then moving your way through your list.
For example, you might owe $500, $200, $10000, etc on your three debts.
The debt snowball strategy would be to pay the minimum due on each except for the lowest one—the $200. You would pay as much as you could off on that one. Once it is paid, you would move to the $500 debt and do the same thing.
Employing this technique has helped many people find a way to pay off their debt much quicker. Check out the link for more information and a free, three-day e-mail series to get you started.
1. Earn more money
This is my number one recommended way to get out of debt! It is the main way I have been getting and keeping myself out of debt for a while now.
Many of us are not able to work more than we possibly are right now. At my job, which I love, I am limited in the number of hours I can work. I could get another job, but because of the many different times that I work (I am a journalist for a small town newspaper and we cover everything no matter what time of day it is at!), that is not feasible.
I wanted to see if I could find a way to create a business that I could do from home on the Internet in my “free” time.
I found a lot of “duds” that promised to make me money while I slept, but none of them produced any more than a deficit in my checking account.
Then I learned about Wealthy Affiliate. You can read my review on them by clicking here.
I am making extra money through writing websites, which I really enjoy doing. I get to help people which I also really enjoy doing!
If you want to learn more about Wealthy Affiliate, you can read my review at the link above or click the banner below. You will be glad you did!
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About the author
Karin Nauber, “G.G.” is a professional journalist who has worked in the newspaper business for the past 27 years. She is also a grandmother who, along with her spouse, is raising one of their granddaughters. G.G. has seven grandchildren with whom she enjoys spending as much time as possible. She began this website with the hope of helping others who may be struggling with debt and need creative ways to get out of debt or to make more money. If you would like to contact her, please do so at: firstname.lastname@example.org.