How to Get Out of Debt. Getting out of debt is challenging, but it can be accomplished with dedication and perseverance.
Step 1
Cut up your credit cards except for one or two to use for emergencies. Throw away the pieces.
Step 2
Cancel all of your credit lines and request a lower interest rate on the debt you have left.
Step 3
Transfer as much debt as possible to the credit card that has the lowest interest rate, or get a **** loan from a bank at a lower rate.
Step 4
Use cash for all your purchases, and only buy what you can afford.
Step 5
Commit to start paying off your debts one at a time and do it. Pay off the credit card and loans with the highest interest rate first.
Step 6
Double your payments on the next debt by taking the payment you made on the first debt and adding it to the current debt.
Step 7
Triple your payments on the next debt by combining payment amounts. Continue until all your credit cards and other debts are paid off.
Tip
Invest in personal finance software to accurately track your spending and identify problematic habits. If you have investments that are paying 6 to 10 percent but a credit card debt with an interest rate of 17 to 21 percent, cash out your investments and pay off your debt. Ask your creditors how much repayment is needed before they are able to send a favorable report to credit agencies. Sometimes they will accept less than your total debt. Use consumer credit agencies to arrange repayment of debt. Many are free.
Things You'll Need
Calculators
Personal financial software