Debt Solution - How to Get Out of Debt

Avoid Bankruptcy and Free Your Debt . Get Refinance Loans , Secured Debt Consolidation or Debt Settlement Advices.

Debt Solution - How to Get Out of Debt


Step #1: Stop accumulating bad (consumer) debt. Whatever you purchase via credit cards must be paid off in full at the end of each month. No exceptions.

Step #2: Make a list of all your consumer (bad) debts. This includes credit cards, car loans, school loans, home improvement loans on your personal residence, and any other bad debts you have acquired.

Step #3: Next to each item listed make 3 columns:
Amount Owed (Current balance)
Minimum Monthly Payment
Number of Months to Pay Off

Enter the appropriate numbers into each column. To arrive at the number of months to pay off, simply divide the amount owed by the minimum payment. But note that credit card companies use declining minimum payments. As your balance goes down, your payment goes down, which may affect the math here.

Step #4: Base solely on the number of months, begin ranking each debt. Put a 1 next to the lowest umber of months, a 2 next to the second lowest number, and continues up to the highest number of months. This is the order that you will be paying off your various debts.

The reason you start with the debt with lowest number of months is that you want to have your first win or success in the program as soon as possible. Once you get that first credit card (or debt) paid off you’ll begin to see the light at the end of the tuned.

Step #5: Come up with an additional $150 to $200 per month. If you are serious about getting out of debts, and more importantly, becoming financially free, then generating this extra money will not be difficult. To be candid, if you cannot generate an additional $150 per month then your chances of becoming financially independent are slim.

Step #6: Pay the minimum amount on very debt that you have listed except for the one you’ve marked with a 1. On this first debt to be paid off, pay the minimum amount plus the additional $150 to $200. Keep doing this every month until your first debt is paid off. Scratch that debt from your list.

Step #7: Congratulate yourself!

Step #8: Pay the minimum amount due on every debt that you have listed except for the one you’ve marked with a 2. To this debt, pay the minimum amount due plus the entire amount you’ve been paying on debt #1.
After each debt is paid off, take the total you were paying on that debt and add it to the minimum amount due on your next debt to get your new monthly payment. You will be amazed at how quickly this amounts adds up and how quickly your credit cards, car, loans, and so on are paid off.
Continue this process until all the debts on your list paid off.

Step #9: Congratulate yourself!

Step #10: By this time the monthly payment you were paying on your last debt is likely to be quite substantial. Keep paying that amount every month. Except now, instead of paying it to your creditor, you can pay it to yourself and build an emergency saving fund and then start investing. You’re on your way to building wealth!

Source: The ABC’s of getting out of debt - Sutton, Garrett

Debt Solution - How to Get Out of Debt

Avoid Bankruptcy and Free Your Debt . Get Refinance Loans , Secured Debt Consolidation or Debt Settlement Advices.